Wednesday, December 22, 2010
Meridith Whitney: Wave of Muni Defaults to Spur Layoffs and Social Unrest
Responding to the uproar over her "60 Minutes" interview broadcast on CBS Sunday night and highlighted earlier this week on this blog, Whitney defended her prediction that at least 50 to 100 cities and towns could default on their debt as states and the federal government cut back on financial support.
Many experts tied to the Muni Bond industry dispute her claims.
The big problem is that cash-strapped states will no longer be able to provide the financial support to municipalities as they have in the past," said Whitney, who is CEO and founder of Meredith Whitney Advisory Group.
"States clearly have been funding municipal governments—for now up to 40 percent of their total expenditures," she expounded. "As the states become more compromised from a fiscal standpoint, that funding is going to end."
The federal government is unlikely to bail out the states either, added Whitney, because the cost—which she put at $1 trillion—would cause a political backlash. "Who in Nebraska's going to want to bail out someone in Florida?" she said.
She also sees parallels with the turmoil in Europe over austerity measures imposed there. Is she correct that European style riots are headed to the US as benefits are cut and state workers laid off?
Posted by The Grouch at 1:00 AM
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I don't know. Ms. Whitney could be right...she sometimes makes some good calls.ReplyDelete
I have to say that the mistake many people have made is that they just went to work and did their job and raised their kids and ignored the decision making that was going on. And even today they don't ask questions.
Our library system in Howard County, in every branch, has every episode of the Sopranos and (for that matter) just about every other TV show ever made. Is this what we want in our libraries? There are perfectly good private cos. that rent DVDs.
The schools of course have fitness centers that rival or exceed those that are available in the private sector. If we paid the same attention to academics as we pay to athletics we would have the best public school system in the world. But instead of teaching quality the unions are focused on benefits and, you have to admit they have done a great job.
This week the community center closes until next year - part of the furlough to save funds. How long will the furlough be next year?
I'm going to have to get a Howard County Library Card. Up here in Carroll county we don't anywhere near that kind of selection in the libraries, but then again I haven't heard that any county workers have been furloughed either.ReplyDelete