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Municipal Bond Market Crash 2011: Are Dozens Of State And Local Governments About To Default On Their Debts?

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In the United States, it is not just the federal government that has a horrific debt problem.  Today, state and local governments across America are collectively deeper in debt than they ever have been before.  In fact, state and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP.  Once upon a time, municipal bonds (used to fund such things as roads, sewer systems and government buildings) were viewed as incredibly safe investments.  They were considered to have virtually no risk.  But now all of that has changed.  Many analysts are now openly speaking of the possibility of a municipal bond market crash in 2011.  The truth is that dozens upon dozens of city and county governments are teetering on the brink of bankruptcy.  Even the debt of some of our biggest state governments, such as Illinois and California, is essentially considered to be “junk” at this point.  There are literally hundreds of governmental financial implosions happening in slow motion from coast to coast, and up to this point not a lot of people in the mainstream media have been talking about it.

Fortunately, a recent report on 60 Minutes has brought these issues to light.  If you have not seen it yet, do yourself a favor and click on the video below and spend a few minutes watching it.  It is absolutely stunning.

In the piece, one of the people that 60 Minutes interviewed was Meredith Whitney – one of the most respected financial analysts in the United States.  According to Whitney, the municipal bond crisis that we are facing is a massive threat to our financial system….

“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.”

State and local governments across the United States are facing a complete and total financial nightmare.  The 60 Minutes report posted below does a pretty good job of describing the problem but it doesn’t even pretend to come up with any solutions….

Unlike the federal government, state and local governments cannot just ask the Federal Reserve to print up endless amounts of cash.  If state and local governments want to spend more than they bring in, they must borrow it from investors.

If the municipal bond market crashes, and investors around the world are no longer willing to hand over gigantic sacks of cash to state and local governments in the United States, then the game is over.  Either state and local governments will have to raise taxes or they will have to start spending within their means.

Most Americans have no idea what this would mean.  For decade after decade, state and local governments throughout the nation have been living way, way, way above their means.  If the debt cycle gets cut off, it is going to mean that many local communities around the nation will start degenerating into rotting hellholes nearly overnight.

We are already seeing this happen in places such as Detroit, Michigan and Camden, New Jersey but if the municipal bond market totally collapses we are quickly going to have dozens of Detroits and Camdens from coast to coast.

Let’s take a closer look at some of the state and local governments that are in some of the biggest trouble….


California is facing a 19 billion dollar budget deficit next year, and incoming governor Jerry Brown is scrambling to find billions more to cut from the California state budget.  At this point, investors are becoming increasingly wary about loaning any more money to the state.  The following quote from Brown about the desperate condition of California state finances is not going to do much to inspire confidence in California’s financial situation around the globe….

“We’ve been living in fantasy land. It is much worse than I thought. I’m shocked.”

Unfortunately, the economic situation in California continues to degenerate.  For example, 24.3 percent of the residents of El Centro, California are now unemployed.  In fact, the number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.

The housing market in the state is also a major drag on the economy there. For instance, the average home in Merced, California has declined in value by 63 percent over the past four years.

The state of California is swamped with so much debt that there literally appears to be no way out.


The state government of Arizona is so incredibly starved for cash that it actually sold off the state capitol building, the state supreme court building and the legislative chambers.  Now they are leasing those buildings back from the investors that they sold them to.

Arizona also recently announced that it has decided to stop paying for many types of organ transplants for people enrolled in its Medicaid program.


Illinois is widely regarded to be in the worst financial condition of all the U.S. states.  At this point, Illinois has approximately $5 billion in outstanding bills that have not been paid.

According to 60 Minutes,  the state of Illinois is six months behind on bill payments.  60 Minutes correspondent Steve Croft asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded….

“It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state.”

The University of Illinois alone is owed 400 million dollars.  There are approximately two thousand not-for-profit organizations that are collectively owed a billion dollars by the Illinois state government.

New Jersey

The New Jersey state budget has been slashed by 26 percent, a billion dollars have been cut from education and thousands of teachers have been laid off.

But even with all of those cuts, New Jersey is still facing a $10 billion budget deficit next year, and the state has $46 billion in unfunded pension liabilities and $65 billion in unfunded health care liabilities that it is somehow going to have to address in the future.


Detroit Mayor Dave Bing has come up with a new way to save money.  He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.


One Miami commissioner declared earlier this year that bankruptcy may be the city’s only financial hope.

Philadelphia, Baltimore and Sacramento

Major cities such as Philadelphia, Baltimore and Sacramento have instituted “rolling brownouts” in which various city fire stations are shut down on a rotating basis.


The second most dangerous city in the United States – Camden, New Jersey – is about to lay off about half its police in a desperate attempt to save money.


Oakland, California Police Chief Anthony Batts has announced that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

Nassau County, New York

In New York, the country of Nassau (one of the wealthiest counties in the state) has a budget deficit that is approaching 350 million dollars.

America used to be viewed as the land of great economic progress, but that is no longer the case.  Sadly, all over the United States there are signs that we are actually going backwards as a country.

All over the nation, asphalt roads are actually being ground up and are being replaced with gravel because it is cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt road into gravel over the past year, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.

Just think about that – we are actually going back to gravel roads.

What’s next?

But this is what is going to happen all over America if dozens of state and local governments start defaulting and the municipal bond market crashes.

In fact, don’t look now, but there are signs that a “bloodbath” in the municipal bond market has already begun.  The months of November and December have been incredibly rocky for municipal bonds.

The days when U.S. states and cities could borrow seemingly endless amounts of incredibly cheap money are officially over.

So where are state and local governments going to get the money that they need?

Well, they are going to come and try to get it from you of course.  Over the past two years, 36 of the 50 U.S. states have jacked up taxes or fees.

Many local governments are trying to raise funds any way that they can.  For example, from now on if you are caught jaywalking in Los Angeles you will be slapped with a $191 fine.

This kind of thing is happening all over America.  Police departments are being turned into revenue raising operations.  Police are so busy writing tickets that they barely have any time to investigate actual crimes anymore.

But it simply is not going to be enough.  State and local governments across the U.S. are facing financial holes of legendary proportions.

The 60 Minutes report above stated that the combined unfunded pension and health care liabilities of the 50 states is $1 trillion.  Unfortunately, that is an estimate that is probably way too conservative.  In fact, two prominent university professors have calculated that the combined unfunded pension liability for all 50 U.S. states is approximately 3.2 trillion dollars.

So if the municipal bond market does crash will the federal government step in and bail everyone out?

Well, this upcoming spring the $160 billion in federal “stimulus money” runs out.  At that point there will likely be a huge cry for even more “stimulus money” for state and local governments.

Unfortunately, as I wrote about yesterday, the federal government is also flat broke and swimming in an ocean of endless red ink.  Congress could potentially step in and try to bail all the state and local governments out, but in the end it is the American people who are going to have to pay the bill.

We are on the verge of a horrific economic collapse which is going to change life in this country as we know it forever.  All of this debt is absolutely going to swamp us.  Our politicians can keep trying to kick the can down the road for as long as they can, but eventually the financial nightmare that so many of us have been dreading is going to overtake us.

  • The federal government will “probably” bail out most states. Then, in the future when every investor from every country figures out the US Fed is just printing toilet paper Monopoly money, the entire system will crash in a matter of days.

  • Michael2

    I have accepted what looks like an inevitable global socioeconomic collaspe and learned to enjoy the spin as we swirl around the drain.

    I can’t imagine anyone bragging anymore about having attended Harvard, Yale, Oxford or being a Rhodes Scholar, etc. given the condition these ‘best and the brightest’ have left this country and the rest of the world in.

  • Gary2

    HEAVILY tax the rich-problem solved!

  • I love your website. Keep up the good work.

  • Guess what if you don’t like it, then Obama has something for you, an Executive Order to detain “terrorists” “high value targets” etc. INDEFINITELY.

    Executive order for Indefinite Detention of basically anyone defined by the government as “terrorist/domestic terrorist/radical/high value target, and we all know who all of this gestapo, gulag, stasi, and police state tyranny is for; patriots, ron paul supporters, constitutionalists, 2nd amendment supporters, bob barr supporters, tea party, gadsden flag, and so on

  • mondobeyondo

    Most states are already flat broke. Once Arizona, California, Illinois, etc. finally drain their citizens through property taxes, sales taxes, emissions control taxes, dog walking taxes, gas taxes, sewer taxes, traffic stops, etc., they’ll run to “Mommy” (the federal government) for further financial assistance.

    Bad news! The federal government is even more broke (broker?) than the states are. No help there!

    Maybe Califoria could ask the Fed for a bailout? Arnie could walk up to Ben Bernanke and say, “Give me da stimulus, or it’s hasta la vista, baby”. Uh, no he can’t. Jerry Brown is running the show now.

    This country has already gone off the cliff.
    Hope you’ve got a parachute.

  • Faux Gary

    Simple-just tax the rich and spread the wealth around. A simple solution (from a simple mind).

  • Richard L.

    This was an amazing eye opener for me. The video clip sent chills up and down my spine as I learned that the house of cards will be collapsing sooner rather than later. I moved myself and my family out of the country to avoid this and hoping that it will pass us by. That may just be wishful thinking.

  • The financial system as a whole is already at its worst and the government has already known about this, even before the Lehman announced its bankruptcy. And right now, it’ll just get worse. We were hoping it will get better, but it seems nothing will be done good especially this Holidays.

    We help Americans find jobs and prosperity in Asia. Visit for details

  • jp

    hi mike-

    first time poster, long time fan; if you go to my personal blog, which i recently “hid” (for personal reasons) but will share with you (you can tell others if you’d like, the storm has more or less passed) here:

    if you scroll down the left nav bar, you’re in my list of recommended sources.

    anyway, the 60 minutes report was indeed good, but truth be told, as a native californian, i’ve been calling this WAY before. and i like meredith, i’m a fan of hers as well – she in fact is one of the analysts i recommend — again see the sidebar as well as my site at

    the truth is that while indeed we live in historic times, with fed, state and local governments at record setting debt levels, “cali” is a different animal. even one of the biggest welfare mothers on earth, jamie dimon, called this. see:

    why is cali so alike but different? because, depending upon who’s doing the talking, we’re the 6th largest economy IN THE WORLD. we’re a nation state. the implications for cali defaulting on its bonds is horrific. while i don’t have the details on who some of our biggest bond holders are, i would think that all of the big money pools have a piece, from pensions to hedges to sovereign. look at ireland right now and greece before them, and you get a tiny peek at something the likes of which we’ve never seen, because they are like gnats compared to the lumbering mammoth that is the golden state.

    my grandparents came to this country with nothing and built a better life for their kids, who in turn did the same for me, at the tail end of the boomers. my grandparents’ values — work hard, be honest, contribute, be helpful, be good to others… those values have been utterly vaporized in the culture of “ME”.

    instead, we have the most superficial, inane and distracted time i’ve ever experienced, and i’ve lived through 10 presidents.

    i was speaking with a college friend about the meltdown, and we both agreed that 1) we have no one to blame but ourselves, and 2) education is definitely one of the core reasons for our woes.

    i’m a product of public schools, all the way through to university, and i emerged from 16 years of “education” not having a clue as to the way the real world spins. and if everyone is honest, they’ll recognize that this is so. what else explains how we continually are the suckers forever at the bad end of every deal shoved down our throats…? i can’t even talk about the most elementary things concerning the meltdown without a glazed look — or one of annoyance — comes over some people. they simply lack the tools to understand, but more, were never taught history (my major) — THE MOST IMPORTANT SUBJECT.

    there’s an old poker saying that’s apropos; if you sit down at the table and look around but can’t spot the sucker (sometimes called a “fish”), then guess what?

    our day of reckoning is here, i maintain. it isn’t next year, it is NOW. we are in unprecedented times, and it will take one thing for sure to get on the right track; a PRODUCTIVE CAPACITY. what we could be doing with sustainable energy alone would provide so much work it’s a no brainer. with solar alone, the amount of work would be a revolution and free us from the madness that is oil, while creating so many jobs and entrepreneurial opportunities, it just makes too much sense.

    but what do we do? in a fundamental violation of basic investing 101, we go ALL IN WITH OIL, because they have bought our politicians lock stock and — ahem — barrel.

    churchill famously remarked that america always makes the right decision, after they’ve exhausted every other possibility.

    i’m not sure that’s so this time.

    keep going mike, and don’t stop.

  • Lawrence

    The reality is that many smaller communities will use the tactics of fines and crinimal penalties to raise revenue. I expect to see the return of massive numnbers of tickets by police for minor infractions (speeding ONE MILE over the speed limit and NO warnings-just tickets), and high fees by towns for major and minor services.

    These are signs of desperaion by communities.

    Best wishes.


  • Matt

    The ‘economic collapse’ will be in the form of a hyperinflationary collapse about 5 years from now. This option is the least painless option. We will seek the path of least pain until we are dead, like someone dying from terminal cancer in a nice comfy hospice bed all drugged up on morphine. Ben Bernank’s eDollar creation machine (aka, antiquated printing press) is the morhphine. Gary, you won’t need to tax the rich. You’ll be rich yourself with your newly minted $100Trillion dollar bills – hahahahaha! Then I can tax you, you rich son-of-a-gun. Hahahaha!

  • William

    Many Muni issues are insured. I wonder if the insurers can pay off.
    Many state, county and city governments have become bloated with far too many employees and huge pension obligations. If the Muni world collapses, you will hear a lot of whining and pouting. Then, the federal government will step up and bail out these state and local governments. Actually, the feds are already doing that with so many states borrowing to meet unemployment compensation shortfalls. This game will continue until we have an Argentina style collapse. There is no way to avoid it.

  • peakoilnondenyer

    The Federal government will not bail out the states because they do not have the money, and aside from that, many states are trying futilely to declare their independence under the Tenth Amendment. So if the Federal government did have the money for federal bailout, then the states would most definitely be forced the give up their independence under the Tenth Amendment. It would be a situation of, “play ball or else.” There simply are no easy answers to any of this, and certainly no easy way out.

  • Steve

    I have said before and will say again we can’t borrow our way out of this. Great article and yes the truth does hurt. Our Founding Fathers started this country without a Central Bank and they were right for not having one.
    We are all guilty here. We didn’t pay attention and gave our representatives trust they didn’t earn. Looks like we are all about to start paying the price.

  • Dave in Scenic City

    Does not history tell us that the likeliest “solution” to a catastrophic, nationwide debt problem is war? If so, all bets are off as to what happens to the dollar.

  • PatriotRider

    “We are on the verge of a horrific economic collapse which is going to change life in this country as we know it forever. All of this debt is absolutely going to swamp us. Our politicians can keep trying to kick the can down the road for as long as they can, but eventually the financial nightmare that so many of us have been dreading is going to overtake us.”

    The sooner the better…

  • DaShui

    Of course they will bail out the states, either publicly or through some “back door”. Maybe no interest “loans”, that will be forgiven. Where do voters live? In a state. And you can’t bail out one, without bailing out all. Such is democracy.

  • victor wong

    i’m sure ben and his crew will print up a fresh trillion to back stop all the flat broke states.QE3 is on runway

  • Richard Allen

    I beg to differ with everyone there will not be a collapse instead people will just get paid say 85% and an IOU for the other 15%

    A collapse will happen if they are forced by the courts to pay in full until the checks start bouncing, then watch out below.

  • next dec 12 2012?????

  • Jeremiah

    They will do a bailout if they want to keep the ponzi scheme going. This is getting uglier by the minute. The newspapers alternate between how much better we are doing vs. doomsday.

    Based on rumor, I expect that the curtain will come down at the end of 2011.

  • Tracy

    As a somewhat infamous preacher has said, AMERICA’S!!! CHICKENNNNS!!! have come home to roost. may God help us.

  • Degaz

    Imagine the uproar of pensioners when these bonds cannot be rolled over.

    These municipalities need the bonds to cover their entitlements.

    This will not end well..

  • JLouise

    A good idea to stock up on food and water. Take advantage of huge after-Christmas clearance sales on basics. There will be continued inflation in food and clothing next year.

  • Don Levit

    At least the states’ pension plans have real assets in their trust funds. About 23% of their assets are in government and corporate bonds. Contrast this with the federal retirees’ pension plan, which is 100% invested in Treasury securities, and when it pays its beneficiaries, it’s just like paying for battleships – out of current revenues and debt. The federal trust fund makes it no easier to pay beneficiaries than if the trust fund didn’t exist.
    I can provide objective governmental excerpts and links to support my statements for anyone who is interesdted.
    Don Levit

  • BiBi

    Agree with above poster. I have recenty traveled from coast to coast and then some. This is a synopsis of what is really going on. Californians seem to be in lalaland. Look good and spend money, lots of it that you don’t have. LA has become very dangerous. Police will knock on your van if you stop to rest with a coffee even if you are at a convenience store. It is illegal to sleep in your vehicle and you will be arrested. Las Vegas is full of poor and homeless wandering around aimlessly. Tent cities and blocks of people living on the streets. dirty and super dangerous. The decline is in your face. Police and security presence are at ‘ad nauseum’ levels. AZ and NM are shitholes. My family refused to get out of the van in Albuquerque. Sedona is still nice but its surrondings make it on borrowed time. Little artsy towns will be taken over quickly when TSHTF. The only city I went to in TX was Amarillo. Didn’t see much but it looked seedy and dirty along the highway. OKlahoma- OMG. If I didn’t stay on a military base, I would have broke the speed limit to get through it. The thought of getting gas in Little Rock still gives me nightmares. Enough said. AK- Lots of boarded up towns. Saw this all along Route 40. TN- Stay away from Memphis if you want to live. Nashville is the craziest city I have ever seen. Everyone acts like they are on speed. When you get around Pigeon Forge, Maggie Valley and Gatlinburg, you see the true beauty of this state but they are tourist traps. W. VA is beautiful, but the people are very backward. I could live in Northern W. VA. East coast- VA. Beach has been in decline and was just dubbed the “most drunken city in the U.S.” They must be proud. Lots of trouble here. Big police presence. Took 10 minutes for me to get questioned about my out-of- state plates. N&S Carolina- Bigger cities are dangerous, especially Columbia, SC. Big police presence. Baltimore- be afraid, be very afraid. Keep going. NJ- Something like a horror movie. Do people really live here? Scary and smelly. NYC- Was advised by thruway attendent to “keep going and don’t stop” Overturned cars, tons of high rise ghettos, not a safe place. I was terrified my van would break down. Albany, NY.- my destination. Ghettopolis. Stopped by police within minutes as to why I was driving in city so late. ? Informed it was not safe. Stopped again the next day regarding my plates at a police check. They threatened to tow my van because my “license didn’t come up”. [he was holding it] Stopped again for seatbelt violation. I always wear it but he said he couldn’t see it. Am I imagining it or did I really see National Guard walking around with rifles? Well, I promply left NYS and will never go back. The Florida panhandle is far from perfect and has an ever expanding police force, but it is quiet. Not safe, but quiet. Lots of folk looking for land in AL. From my experience, the U.S. is in dire straits. Everything this site has said about the decline of America is true. What struck me the most was not the condition of things but the mentality of most people. How did everyone get so damn stupid? From what I have seen the decline of the U.S. is in full force. “Land in Alabama” is not going to cut it. It is time to leave…

  • BiBi

    Will someone please explain how “running to the feds for help” is going to play out? How can we be dependent on something that is broke? I don’t get it.

  • Patriot One

    Bottom line; Muni’s will bring down Counties, Counties will bring down States and the States will bring down the Fed’s. The really bad news is that they are all, already BROKE. Think about it only 4 States are in the Black. The newest numbers I see on the Feds is that the debt and unfunded liabilities are over 202 Trillion, but again who really knows.

  • Michael

    Hey Gary, the rich don’t have nearly enough money to tax to cover these debts and deficits. Bill Gates is the richest man in the USA, for example, but is only worth about 50 billion dollars, and that is a lot of money for one person, but we are talking about budget deficits (state, federal, local) in the trillions. The rich aren’t rich enough to steal from them to cover these problems.

  • The FED will buy all the bond necesary, rigth now how are runing?
    Printing money . God bless Bernake.

  • alice

    Austerity is the only responsible thing to do! Anything else is just adding to our kid’s future debt. Stop printing money, stop borrowing, stop spending money we don’t have!

  • VegasBob

    As long as Bernokio runs the Fed, his electronic printing presses will churn out trillion$ of counterfeit dollars. Since he’s already bought everything else and broken God knows how many laws, it is easy to predict that, sooner or later, Bernokio will be buying muni bonds.

    However, if something cannot continue, it will stop. This is true for Bernokio’s printing presses and all of his counterfeit electronic dollars.

    The only real question to be answered is when the game finally stops.

  • Marty

    Sad thing is; the states and feds even if there was some magic way to balance the books, would be back in the red the following day. They spend and spend and just do not care!

  • GoneWithTheWind

    The feds will bail out one or two states and it will cost so much that either they will run out of “borrowed” money or the citizens will raise hell and stop it. The states will use the bail out money to insure teachers unions and state workers unions keep their jobs and the hell with the citizens of the state. The money will all be gone in a couple of months and the debts (or most of the debts) will still be there. Our governments/politicians are so screwed up that they cannot be fixed. Until the people get pissed off enough to fire all the politicians and replace them this will continue. Our governments will continue to borrow money to give to the unions for votes and your taxes will continue to go up to pay for all the fat cat union members.

    The average pay for a unionized autoworker three years was $100,000 a year. Did you get $100,000 a year??? This is for work anyone with an IQ above 80 could be trained to do.
    This isn’t going to end until everyone is drained dry and we are in a total collapse.

  • William

    Ahh, screw it! I’m going back to bed. Wake me when it’s over.

  • Ed

    Wow bibi did you see mad max in your travel? I LIVE in New Jersey and other than camden and newark the state is safe and relatively clean. Its always been a case of pay attention to your suroundings no matter where you are.

  • Thanks guys and gals for the excellent article!!
    We’re just like the U.S.S. Titanic, regardless of how you arrange the deck chairs, this big ship is going to to Davy Jones Locker!!! There is absolutely nothing the states can do at this point to stop the damage!!! Talk about going over the cliff, both feet are now on a banana peeling and we’re descending at 180 feet per second to crash and burn!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    This is what happens when a country turns their back on God!!! History is repeating itself again!!!

  • Teresa

    Very entertaining post! LOL and SOL (sob out loud)
    You didn’t mention CO,MT,WY,or ID are they still bearable?

  • Bill Anderson

    Make everyone pay taxes and have a flat rate. End the federal reserve and go back to the gols standard. End all social programs.

    Tax the rich? give me a break.

  • Gary2

    If taxing the rich and spreading the wealth will not solve this because the rich don’t have enough then it will at least go a long way towards solving it. Tax then HARD! Then go after corp[orations and tax them harder. They are sitting on piles of cash. They obviously got the piles of cash from paying poverty wages to workers. Take back our money they stole and give it to us. That will stimulate the economy!

  • James

    The biggest problem about this clip is that it is from CBS 60 minutes, a propaganda outlet. One, in watching this vid, must decide what their real angle is.

  • Aurora


    I loved your post. I agree it was time to leave, YESTERDAY. A lot of us have been duped by this game and now we are too poor to do anything about it. For a lot of people it seems there are only two ways out of this: 1. suicide (leave this material world) 2. win the lotto (clear all debts and have the funding to leave the country)

  • Onlyme

    I say let them go broke, that’s the only way it will ever stop. I’m retired and it will kill me but that’s the breaks of ignorance. As per Woody Guthrie, “So Long it’s Been Good To Know You”.

  • PuppetKing

    US economy is one giant ponzi scheme.
    Fraud is rampant at all levels of government and all branches of government as well.
    The dumb wits in power think that they can import immigrants from foreign countries and work them as slaves and making them pay all kinds of taxes to keep their entitlements and pensions going, all this rosely cloaked behind the “American Dream”.
    The secret is out now and this ponzi financial system has collapsed. The young will end up unemployed for the rest of their lives, and the old will loose all their pensions and benefits and end up dying on the streets.
    The party is over. Go home now. Tomorrow is not going to be a pretty day.
    End of story.

  • Russ

    One thing Bibi said that I TOTALLY agree with….

    “What struck me the most was not the condition of things but the mentality of most people. How did everyone get so damn stupid? From what I have seen the decline of the U.S. is in full force.”

    I am in total agreement with the above statement, based on my everyday experiences. It seems there has been an exponential explosion in the number of absolute imbeciles and morons in this country. I swear that most people I encounter on an everyday basis have double digit IQ’s, it’s frightening ! Perhaps it’s that fluoride in the water thing…? Something has been making people into slobbering low life idiots. Just go to any State Fair and you will see what I mean.

    They say that people get the government they deserve…..God Save the Republic !!!

  • J. Robert

    Hey! Nuthin’ a good, mindless round of “Yes we can! (or better, “Yes, we have no bananas”) won’t solve, if you are a leftist.

  • alice

    As long as our government is borrowing trillions of dollars or printing trillions of dollars to keep us afloat, you should really just hold off on your optimism about how good things are going to be! It was announced in a city nearby in NY State, an increase of 71% in real estate taxes to prevent bankruptcy! This will force landlords to increase rents, and these tenants will move away instead of paying more rent! Those apartments will be vacated, lowering property values, rents, leaving nothing behind but a ghost town! Once everyone has left, Austerity measures will be imposed. Isn’t this all being done backwards? Severe austerity should be implemented first, so that people won’t be forced to move away! Nationwide Austerity must be implemented first, not tax increases! Austerity will effect the people running these towns, cities, counties, states, etc.. that is why they won’t implement AUSTERITY FIRST! Europe is in big trouble because they waited too long for AUSTERITY, lets not make the same mistake in the USA!

  • Justin

    It is astounding, nay, astonishing that we have come so far to this precipice, and only now that we have gazed off the edge and slipped that we noticed our mistakes.

    The problems the world faces today are those of inaction on the part of good people, and the actions of those to silence the good folk that do rise up. Life, liberty and the pursuit of happiness does not grant you the right to destroy someone elses inalienable human rights.

    A number of men and women are responsible for taking advantage of the United States citizenry, but beyond that, the citizenry is equally to blame here. I do not tow party lines, and I am neither Republican or Democrat, I am considerably centrist in political affairs. This is the result of electing officials who do not exactly agree with what you want in a political official short of running for office yourself.

    Our education departments have failed us, our parents of the Union have failed us, every single sector of common knowledge, life, and leisure has failed us. This means now that we are in a critical time as Americans, and moreso as human beings. We must rise up from the ashes, stronger and better than before to create a more perfect world, or we will continue to repeat the pasts mistakes until the future no longer lets us make them.

    It is my hope as I enter the teaching profession that what little wisdom I possess, if any, will be imparted onto the children and teenagers that grace my classroom. I can only hope that I do not do them a disservice, and I may only speculate at what wonders they might conceive.

    Perhaps if we had taught our children better during the 80’s an onward, this global disaster might have been averted.

  • I looked at the California website that has a list of all the public employee’s that Arnold paid minimum wage to until the budget was passed. Incredably most employee’s were working for the penal system as prison guards making about 120K a year. Just imagine all the prison guards who are now retired collecting a mega pension. Common sense tells you that taxpayers just can’t pay the pensions for all those public employee’s from years past. Something has to give, and it will probably be my wallet.

  • Didn’t we have a budget surplus the last year Clinton was in office? Then came Dubya. W(double-ya) failed at everything he has tried. Co-owner of the Texas Rangers who hardly won a game and was driven into the ground and bankrupt. As a pilot (stop laughing) during Vietnam his reserve unit reported him AWOL twice, but daddy and the CIA fudged the files. The Saudi’s gave Dubya millions of dollars for W to start an oil company called Babusto, you see the Saudi’s needed favors from Daddy who was president at the time. Dubya was excellent at drilling dry holes in the Texas soil and failed in his attempt as a oilman. He did become governer of Texas and became proficient at rigging elections which came in handy in 2000 and 2004, thank you Diebold black box electronic voting machines, another Texas company. So Dubya became president and got better and better at reading the cue cards and telepromters the mega banks and military industrial complex corporation made up for him. Then Dick Cheney’s top secret energy plan was put into motion and we invaded Iraq. Banksters sensing the country was going broke and Dubya was in his final year looted the treasury and are now living happily ever after, while taxpayers will foot the bill. Nice job Dubya, you idiot.

  • William Kern

    We didn’t have a surplus under Clinton. Clinton paid down the debt by taking funds from other places, mostly Social Security. It was off-budget smoke and mirrors that every administration does.

  • R Drozek

    It is very clear to me, growing up with the Irish Daley’s in Chicago;namely,the Unions have embraced the Gay deviates as a political wedge to gain, who act as the Political and our the Storm toopers of the USA Democrat Party, to ensure that our tax dollars pay for government union member’s. By the way, look closely, we have over 87% in our City, County, State, and Federal layers, who will be collecting huge pensions for their work to ensure that the Socialist Marxist party remains in power to give the future Socialist voters American’s our life, liberty, and pursuit of happiness…all of this support was created by the Catholic Church so as to fill up their pews and collect plates.

    The greatest evil in 2011 against our Republic will be the Lawyers,Unions,and Media whether they are in their black robes or prancing around in our People’s legislative conferences, Lawyers will work out a way to steal from the Great American People and to give to themselves and their families. America’s Family courts are ruled by the DNC and their agenda is to promote Gay Marriage, a Gay Military, and to destroy our Churches and the love that arises from baptism.


    It is time to look closely at how judicial terrorist such as Patrick Tondreau who is a non-American but a Canadian who moves into our Great Nation to sow his Gay and destructive socialist agenda upon America’s Families and children.

    We must unite and be prepared to use every available method to change our Constitution and to eliminate the Corporate IT, Advertising, and the major Media Corporation. These Media Corporations have used their Hilter and Mussolini Corporate Socialist Political agenda to kill America.

    As in Mexico, Iraq, Philippines, North Korea, Vietnam, Congo Republic, and so many Nations on this Planet, Lawyers have corrupted the rule of the People Our People are victim, because you and so many on the “affirmative Left” have become cowards, unwillingly to change the courts of history.

    (1)Let us begin by removing all lawyers from elective offices as they are the funnels of greed.

    (2)Let us eliminate all Unions Groups that seek to hire illegals to clean up their construction sites.

    (3)Let us repeal the tax benefits for the Billion Dollar IT firms who have destroyed America by giving over 50,000 USA engineering jobs to H1 Chinese, Europeans, and etc.

    4) Let us form a militia force to counter balance the US Federal Government which has acted against the best interest of America and our people

    We have nothing to fear by death itself. We can remove the legal puppets and their propensity to gain great wealth with their legalistic verbal manipulations. Our People deserve better than this current state of affairs.

    Lawyers are the minds of economic progress but these minds only work to confuse, to steal, and to kill our life, liberty, and pursuit of happiness. It is truly the time to (1) unite as a strong force and to remove the propagandist in the US media who only create chaos and fear marketing.

    (2)As in France, Monopoly control will be removed!



  • James Madison

    If I’ve ever learned anything it is that what everyone thinks they know is exactly what THEY want us to think. I don’t see one example of anyone who really knows that truth. Do I hear a baa baa here? Perhaps you sheeple will pay attention for a moment and learn just how duped you are.
    There are some 3600 counties in our nation. I don’t know the number of cities off hand. Let’s examine just one of these counties for a moment.
    The name of it is irrelevant, they are all the same. Within the County there are several agencies. For this example we will consider the fire department. It would be the same for the schools or police department and on and on and on. The fire department had a retirement fund set up. For this example we will say each fireman contributes $100 every pay day to his retirement and puts it in the fund. He is told his return will be guaranteed 10% at retirement.
    All these agencies have this fund. There are 3 companies that handle these funds. They invest them. Where? Top companies on Wall Street. Now, the fireman retires and receives $110. No one is told that the profits from that $100 investment made $1000 or more. Does anyone know where the other $890 went? DUH – it’s still in the fund nimrod, and in control of the investor.
    If you think this nation is broke you should ask yourself how many fire departments are in this country, and how many school districts with teachers retirement funds, and police departments with retirement funds, and judges retirement funds, and on and on and on.
    I know many here believe they are “awake”. Sorry folks, but if you believe we are broke you are still living in that dream land THEY have created. The fact is this nation has well over $120 TRILLION in surplus that is being kept from our knowing.
    Here’s another thought you might want to consider. All those government agencies who have invested for their retirement have stock in corporations. 1% this agency, 1% that agency, times thousands of agencies. Take a guess who owns nearly all the corporations of this nation and others? If you said anything other than the combined agencies of the corporate, for profit, United States Government, I hear another baa baa.
    I recommend everyone learn about the work of Walter Burien who is exposing the facts as the Combined Annual Financial Report (CAFR)of the agencies show. What we are told is the “BUDGET” which includes ONLY the income from taxation and expenditures made to provide services to the people, which is ALWAYS in the red.
    Walter’s site is
    Now go and take the REAL red pill.

  • Alex

    Americans ( the ones who still have some brain function and a passport) may I offer an opinion? WHAT THE HELL ARE YOU STILL DOING THERE???!!! LEAVE WHILE YOU STILL CAN!

  • Ev

    Good story. Scary for someone who’s living under a rock and doesn’t know the whole story. Are Municipalities under financial stress? Yes. Are they going to have to lay-off employees, cut services and other costs? Yes. They HAVE to balance their budgets EVERY single year. They owe billions of dollars, but they also collect even more than what they owe in taxes.

    The major concerns are about long term liabilities coming from pension plans and health care costs, which they have time to deal with. We will see a lot of changes surrounding pension plans. Look at WI now, states will do what they can to cut costs. Either make a deal now, or the municipalities will not be able to pay pensions to these people, who behave like it’s owed to them. States can’t, by law, declare bankruptcy. They will make tough choices, people will lose jobs and lose privileges. Municipalities have been over spending, and now that they actually try to live within their means everyone freaks out. Give me a break!

  • paul z

    All you people make me laugh , the average worker in America sees whats going on ,and understands the mess we are in . They are just waiting for the Right leader to show up and lead them. Then all hell will break out ,when they shut the country down .

  • Wahrheit

    Entertaining to read this now with so much parroting of the conventional “wisdom” about finance and debt. If you think that the US can go the way of Greece or that a nation with a sovereign currency is like a family sitting around the table discussing their budget, then you get a mark of “F”.

    The US can only go bankrupt if it chooses to do so and can spend as much as it needs to on whatever it chooses. As for inflation, with so much slack in the economy right now, in particular the excess of labor, inflation is not in the cards let alone the hyper variety.

    Read up on Modern Monetary Theory. You will see that it is not modern and not a theory, just a description of the reality of how money works in the era of fiat currency. Then you will be asking yourself why we are borrowing money to begin with and paying private banks interest on money they are creating out of thin air.

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