Major Cities across the U.S. declaring themsleves bankrupt.

US Cities Going Bankrupt In Economic Crisis

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9:30am UK, Thursday December 22, 2011

Greg Milam, US correspondent


With less than a year to go until America elects its next president, the
country has been warned of a looming new economic crisis.


Major cities across the United
States are declaring themselves bankrupt in the face of huge debts and
declining revenues.

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Birmingham, in Alabama, and Harrisburg, the state capital of Pennsylvania,
are the latest high-profile cities to file for bankruptcy. Analysts warn as many
as 100 American cities are at risk.

They are taking their lead from a scenic California city which has become the
poster child for the blight of municipal bankruptcy.

The federal government can print more money, the states can pass their money
problems down to the cities and then the cities are the ones who are going to
have to go into bankruptcy because there is no one to pass it on
to.

Stephanie Gomes, Vallejo councillor


Vallejo, home to 115,000 and perched on wooded hills across the water from
San Francisco, has just emerged from three years in bankruptcy but still bears
the scars.

Public services were slashed. Half the fire department were laid off, the
police force cut by a third and libraries, parks, senior citizens services all
drastically reduced.

"We've created a situation where the city of Vallejo has become very
attractive for criminals because it just doesn't have the police officers,"
restaurant owner Ken Ingersoll told Sky News.

"You can't market away someone's safety. I can't run an ad in the paper or a
TV commercial saying come to Vallejo.

"If you don't feel safe going to a place there's just no way and mum and two
kids are going to go there."


Bankruptcy has forced Vallejo to close public services -
including its fire station



Some people have made a beeline for the city, including prostitutes from as
far as 500 miles away, who have been lured there by the reduced chance of
arrest.

It prompted residents to organise patrols to drive prostitutes away from
their neighbourhoods.

A city that once had a handful of neighbourhood watch schemes now has more
than 300. Kathy Beistel runs one of them.

She said: "Having it publicly advertised that 'Hey Vallejo has no cops' meant
they would come here because they knew they would not get arrested.

"We would see 10 girls, all times of the day. We came up with some
recommendations on ways we could address the prostitution issue and wouldn't
cost any money and they're trying to put them into place and we might see one or
two a week now, which is incredible."

Vallejo's problems will sound familiar. Like governments across Europe, in
the boom years the city agreed big pay and pension deals for its public
workers.

When the financial crisis hit, the money was not there to pay for it all.

Vallejo councillor Stephanie Gomes told Sky News: "The federal government can
print more money, the states can pass their money problems down to the cities
and then the cities are the ones who are going to have to go into bankruptcy
because there is no one to pass it on to. It is a big concern."

Vallejo has emerged from bankruptcy with debts remaining, but in a better
shape to deal with them.

Assistant city manager Craig Whittom said: "Was it the right financial
decision? Absolutely. But you don't want to get there in the first place so it's
a strategy of last resort."






As it happens , on the News tonight it was reported that in Washington 1 in 3 families are homeless, couldn"t pay their mortgage, the banks immediately
foreclosed and when you think that 1% of the population owns 40% of the Worlds wealth it really is obscene.