Pennsylvania capital, Harrisburg, skips payment, may move closer to bankruptcy

Source: Washington Post

The city of Harrisburg has said that it will not make a $3.3 million municipal bond payment due in two weeks, a decision that could move the Pennsylvania capital closer to bankruptcy. The city's decision, announced in a letter dated Monday, is highly unusual because it saves a relatively small sum of money while compromising Harrisburg's ability to restructure its overwhelming debt and raise money in the future.

"This shows that the city is failing to function," said Matt Fabian, managing director of Municipal Market Advisors, a Massachusetts-based research firm. "Now it seems that a municipal bankruptcy filing is almost a foregone conclusion." The number of fiscally troubled municipalities, such as Harrisburg, is small but increasing...

Harrisburg may be running out of options. Its missed bond payment is part of a $9 million budget deficit that city officials have been unable to close. The mayor and the City Council have been at loggerheads over how to handle the fiscal distress, and the deficit-ridden state of Pennsylvania has been reluctant to step in.

The budget deficit comes on top of $288 million in debt that the city faces in connection with an incinerator project that has become an expensive debacle. Officials said Harrisburg has already missed several payments on that debt and is unlikely to make a $68 million payment due later this year...

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/01/AR2010090105779.html

if they become the first in the nation to rob their pensions.

Watch American workers take to the streets in response. Just in time for the Midterms.

:popcorn:

It plays right into the hands of the tea partiers ranting about irresponsible government spending and relying on the government. It's really easy for them to put this into friggen anti-government soundbytes.

The vast majority of them have accepted the propaganda that it's the fault of immigrants, welfare mothers, liberals and muslims that they have had a raise in 30 years and that it's their fault that their social security payments were stolen. (if only they had let Wall Street "invest" it for them!)

Maybe that is the solution to our nations deficit problems? Bankruptcy.