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PA State Capital Files for Bankruptcy

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    Will other municipalities follow suit?

  • Duration 3:53
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And breaking news out of Pennsylvania the state capital of Harrisburg.

Now filing for bankruptcy protection another grim sign and is very scary economy unemployment now stuck it more than.

9% there's a massive housing crisis some economists are warning it could be a decade before the US economy begins to turn around America is asking.

And were answering and we start gifts it's.

Steve -- -- senior.

-- -- -- You know I remember Meredith Whitney well known analyst on the street who I think it was December of 2010 said look we could see over the next few years hundreds.

Of municipalities.

Going belly up.

Com are we beginning -- perhaps your prediction come true.

That's quite possible you know you look at what's happened in Harrisburg got.

This is something that we're seeing a lot of us cities in California teetering on the verge of bankruptcy.

Couple years ago we -- but the city of Ole hole outside of -- San Francisco declare bankruptcy what's happening here.

-- you've got -- shrinkage of their tax base because property values are falling because of the housing crisis.

Because -- -- fewer people working so that means less money coming in at the same time they have to pay these very high -- salaries they have to pay for.

All of these -- as social welfare programs that -- putting a real squeeze on these budgets and so I think you might see.

More municipalities say you know do what businesses do when they can't pay their bills which is essentially to declare bankruptcy -- one reason by the way.

That they are leaning in that direction and it's a way to get out of some of these labor contracts and renegotiate terms so they can pay their bills.

Bright and receiver comes -- he's got to reorganize everything judge can get rid of contracts all all kinds of things can happen look Steve.

-- Karen hanky sending a -- a question for you mom what in your view Steve will help get the US economy on the right track.

-- -- That's a great question I think everybody wants to know the answer did well look I just got a piece in the Wall Street Journal week or so ago.

Comparing what happened in the Reagan expansion vs the Obama expansion in September of 1983 exactly this juncture.

Of the Reagan presidency we -- one point one.

Million jobs in one month so we know what it takes to create.

Prosperity and more jobs and that is get taxes down rates down on businesses and ambassador so they have an incentive.

-- I just heard your interview with.

What spokesman from the chamber of commerce those are scary numbers businesses don't wanna invest right now and the other thing that we have to do is get regulation off the backs of businesses and I was struck by the fact.

That that survey showed that the new health care bill obamacare something that's really deterring businesses from hiring new workers because of the uncertainty of that belt.

-- -- -- -- Please ask Stephen how many jobs would be quickly created if we opened up.

Drilling slash digging.

That's what I favorite issues I love the person -- that question because.

You know what we have so much oil and natural gas in this country this is the great untold story about our energy future I just in an interview with Harold Hamm who owns a lot of the energy big oil field that we found in North Dakota right you know we're don't.

This a great statistic by the way you know what state and the country has the lowest unemployment rate of that.

That state in -- North Dakota yeah -- they've got a lot less than three and a half percent unemployment in fact they can't fill all the jobs they've got there because of all the oil and gas drilling that's going -- there -- so if we -- just get the EPA in the interior out of the way.

And stop subsidizing wind and solar which are really niche markets and energy and really and that's -- our oil and natural gas industries we can potentially be.

The Saudi Arabia of natural gas and oil in -- -- cup upcoming century yet we could be we could be exporting oil router then poured in there now we've been allowed to biggest oil producer got if we open up that field warn other fields as well here in the no questions.

All right Steve Moore -- all the time we have thanks very much good to see it.

They can do it hit some great.

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