Monday, December 27, 2010

A test of political will

Meredith Whitney recently went on 60 Minutes and warned about widespread municipal defaults. Rick Bookstaber also indicated that the munipal bond market is an accident waiting to happen.

Many American cities are in deep trouble. No doubt that hard choices will have to be made. People are starting to speak up. For instance, Mish has been on a crusade to point out unaffordability of the compensation packages of many state and municipal workers.

Is there the political will to act?
What's more, failures are starting to occur. The New York Times published an article about the town of Pritchard, AL that stopped sending out pension checks. This has had a devastating effect on retirees:
Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

As government worker bashing becomes more popular, expect to see more stories like these about retired dedicated police officers and fire fighters who can't cope. Will the political will be there to make those cutbacks?

People are getting cranky and The political environment is becoming more volatile. Watch out.

1 comment:

Michael Eckert said...

Here is a chart I posted this morning on the blog.