July 29th, 2012
(RussiaToday) – Three California cities filed for bankruptcy – San Bernardino, Stockton and Mammoth Lake and the trend is spreading nationwide.
In the last few weeks, three cities in California filed for bankruptcy – San Bernardino, Stockton and Mammoth Lake.
Oakland, CA is now on the verge of following suit, but they are holding off and trying to fight to stay afloat.
The disturbing trend is spreading throughout the United States with cities and even entire counties declaring bankruptcy.
In the run up to the bankruptcy public workers are often required to forfeit a massive percentage of their pay along with retirement benefits due to threats of bankruptcy being declared in which they will lose everything.
Last year a Rhode Island city told their firefighter’s and police officers to give up 50% of their pensions or risk losing it all.
Michaela Krauser of the Next American City tells RT’s Liz Wahl what happens when cities go bankrupt.
For more in this disturbing trend:
How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely?
How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely? Well, this exact scenario is playing out from coast to coast and in the years ahead millions of elderly Americans are going to be affected by broken promises and vanishing pensions.
In the old days, things were much different. You would get hired by a big company or a government institution and you knew that the retirement benefits that they were promising you would be there when you retired in a few decades. Unfortunately, we have now arrived at a time when government institutions and big companies have promised far more than they are able to deliver, and “pension reform” has become one of the hot button issues all over the nation. Many Americans that have been basing their financial futures on their pensions are waking up one day and finding that their pensions are either gone or have been cut back dramatically. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for state and local governments across the United States is 4.4 trillion dollars. America is continually becoming a poorer nation and all of that money is simply not going to magically materialize somehow. So where is that 4.4 trillion dollars going to come from? Well, either pension benefits are going to have to be cut a lot more all over America or taxes will need to be raised dramatically. Either way, we are all going to feel the pain of these broken promises.