Economic analyst Mike Shedlock
says he's been "waiting for some large city to take initiative and
declare bankruptcy to escape [the] onerous burden of public pensions."
Even just one default could start a chain reaction, he argues. He
thinks that first city could be Miami, and points to an NBC report
as evidence. Miami commissioner Marc Sarnoff has been openly talking about the possibility of bankruptcy, largely due to increased public worker salaries. Sarnoff
only sees a few ways of avoiding it: renegotiating union contracts,
mass layoffs, or raising property taxes--an unlikely route given the
current economy. Shedlock says "bankruptcy is the only option that
makes any sense." Could the next wave of default debate involve cities,
rather than countries
Want to add to this story? Let us know in comments
or send an email to the author at
hhorn at theatlantic dot com.
You can share ideas for stories on the Open Wire.