Few are now unaware of our profligate federal government’s debts and continued spending of borrowed and fiat money. All who bother to consider this, know an end approaches; even governments can’t run on the something for nothing principle indefinitely. But while most are aware of the financial rockslide falling on us from Washington, DC few have paid much attention to the destruction sneaking up from other levels of no less spendthrift government.
Stockton, CA to Take Up Bankruptcy Plan paints the scene in one city failing financially, the largest such to seek bankruptcy in the U.S. per the report, if it proceeds. The state too is insolvent, unable to control spending compelled by unions in an administration of Democrats; one Governor Scott Walker isn’t enough. Other cities are no better off and other states as well. Bonded debt in such places is at risk; so are the pensions owed retirees. Banks and other investors owning these investments may well find they own worthless or nearly worthless paper as the crunch advances. Those that are banks are liable to fail, wiping out the wealth of depositors, savers and the FDIC too. This is an entire, enormous governmental financial mismanagement failure added to the federal folly of which we’re more aware.
Add to that, the student loans our grads now take for granted and increasingly can’t repay for lack of jobs. All the defaulted but not yet foreclosed real estate should be piled on too. The day all holders of that debt are forced to admit they’re never going to be repaid is the last day of our financial system as we know it. And that day is, as one writer might have put it, slouching toward Wall Street to be born.