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Major US cities on the brink of bankruptcy

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    A look at big cities at risk

  • Duration 2:15
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Wendell thank you we're gonna follow up tonight on -- coverage of American cities resorting.

To or flirting with death bankruptcy.

Most of the places we mentioned last night or small to medium size however.

Fox Business Network senior Washington correspondent Peter -- reports some major cities could also be on the break.

The motor city may be on the road to bankruptcy.

In June the debt rating company Moody's.

Downgraded more than five billion dollars and Detroit's -- To junk bond status the city's financial problems have been fueled by years of government corruption and mismanagement.

The recession and bankruptcies up two of its largest employers in 2009.

General Motors and Chrysler only revved up its fiscal problems.

-- some parallels between Detroit and grace so Greece's an area where they really have no economic and -- -- activity.

Very very weak structurally.

And they really don't have a lot of options.

Of the twenty or so municipal bankruptcies since 2008.

Most have been smaller communities but now more struggling bigger cities are opting for bankruptcy.

They have bigger expenses bigger employees' salaries and pension obligations bigger debts and bigger holes to dig out out.

Last month Stockton California.

With a population of nearly 300000.

Became the largest city ever to file for -- chapter nine municipal bankruptcy.

That allow us.

The municipal government to attack bigger problems the bankruptcy court has broad authority.

Two.

Undo.

And car or otherwise modify the collective bargaining agreements.

Aside from Detroit three other cities have earned multiple junk bond ratings Littlefield Texas and two in Rhode Island.

But another 22 localities have a junk bond rating from at least one of the ratings firms including Camden, New Jersey home to nearly 80000 people.

They've been getting along the last two or three years.

In muddling through and ordered to avoid -- bankruptcy process making cuts along the way.

Even cities like Chicago with stronger finances and bond ratings are on notice Moody's downgraded -- towns ratings and April because of underfunded pension plans Bret Peters.

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