How many US cities are on the brink of bankruptcy?
Union pensions creating budget gaps
- Duration 4:09
- Date Jun 27, 2012
Union pensions creating budget gaps
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-- Stockton California is living under -- heavy -- It is set to become the largest city in America to go bankrupt facing a 26 million dollar but -- -- -- to be quiet because US -- out of Virginia writes the following how many cities like Stockton California.
Are on the verge of bankruptcy because they cannot afford to pay union pensions.
Charles Payne brings the pain in the Fox Business Network -- -- good bill good morning to you do we know.
We know that their whole lot you know of course -- now the largest but there are some gigantic cities out there.
The face similar prod prop problems and it all goes down to these unfunded liabilities and I'll stock them.
And that they policemen were able to retire at age fifty -- -- -- city employee after month.
You know your spouse for guaranteed medical benefits for the rest feel like those kind of things outrageous and listen did not do want to make the sort of promises.
I would say -- we thought about this at the dart board.
Bullseye right now -- be probably Detroit everyone's looking at Detroit.
All the talent has left they've -- taxes -- dramatically over the years they've got these unfunded liabilities the state almost took the city over.
That's probably first and foremost but you could write off towns like Los Angeles you could write off Philadelphia.
And there's a whole bunch and in LA and Philly well absolutely hello hi Billy Chicago.
Chicago's really up to big time over the next two or three years.
All of these -- -- gonna hear rumblings about them somehow they've got to figure out a way to turn it around and there's a thing.
These are contracts.
So you know the immediate and may take bankruptcy ultimately -- fix the problem because it may change the contract law that was the only way.
Gain easy here's a list Detroit Michigan you mention that Chicago do you mention that.
Harrisburg PA San Jose California.
San Diego California.
Suffolk county New York.
Now if viewers don't know -- county has some of the richest people in America live in this.
Including their policemen and apartment again -- the problem but that's the problem that's what it boils down to lift it and and we hear about this need to hear about a lot obviously -- -- selection process but.
We have we have over promise and -- -- civil servants and -- just the to the point where.
It's just have met a massive drain -- to the aftermath of Stockton now bill.
You've got about 13 fewer police officers for every 1000 people than the rest of the California.
Murders going through the roof robberies -- burglaries have gone through the -- they -- don't even bother the call the police and let you have it and progress crime happening right at that very moment.
And this this is what happens when the pendulum swings to for a one way becomes all the way back the other way.
You don't unemployment and stock in his 15%.
I mean California's -- high enough at 15% just blows the mind.
But it comes down to management does and not culture that Charles -- because what that city did they they paid forty million dollars for a bank building.
That they wanted to make the city ought never happen they build a new sports arena downtown it really wanted to change the -- They have the money to do that they didn't have a real estate crash comes along right and then you lose the revenue that you depended on to come into the city.
What happens often -- -- economic booms with the private sector public sector does not spending money they use edit this she'll book cover.
To go nuts they had a baseball -- they had an arena what they thought they were gonna bring in the breakers are not the big out of money they spent on these things by the way.
That future City Hall they had to give to one of the bondholders because think that's good we did -- -- bonds so yes it was irresponsibility by these public by these politicians.
And now every once in trouble everyone's crying in this is the worst case scenario that we talk about for America at large.
There's a prime example we don't have to look -- today we don't have to look at Italy Portugal.
Paying -- Stockton California.
Charles very good point you make -- but when you mention Detroit in Philly in LA.
Wow it almost feels inevitable for Detroit that's the bulls are right now we're catching this afternoon okay on fox this is -- -- Charles -- to our viewers got a question went answered.
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Question in the form.
You can figure it out -- because she wraps things together.