Tag: Boomergeddon
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Boomergeddon Watch: Illinois and Puerto Rico
S&P Global has warned that Illinois’ debt could be downgraded to junk bond status if the state doesn’t get its fiscal affairs in order. Paralyzed by partisan gridlock, the Prairie State hasn’t had a budget in two years. Since the Great Depression, no other state has gone for more than a year without a budget,…
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Boomergeddon Watch: Higher Interest on Debt
Today’s Wall Street Journal editorial page explores the ramifications of the Federal Reserve’s decision to dial back years of Quantitative Easing and near-zero interest rates. Higher interest rates will translate directly into higher debt payments for the world’s largest debtor, Uncle Sam. Interest on the debt rose $28 billion for the six months of fiscal…
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The Biggest Lie of All: Government Can Pay Its Pensions
Many people get infuriated by President Trump’s many inconsequential falsehoods — does it really matter how big his inaugural crowds were? — but they remain sanguine about the trillion-dollar untruths that our public pension system is built upon. The big lie that governments will make good on retirement promises to their employees is not merely mendacious but it is…
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No Magical Solutions for Trump
Someone in the national press corps is finally focusing on an issue less ephemeral than Donald Trump’s tweets: the fiscal disaster that looms if all of the president’s programs are enacted. Writes Rachel Blade and Josh Downey in Politico: “I don’t think you can do infrastructure, raise defense spending, do a tax cut, keep Medicare, Medicaid…
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More Hidden Deficits: Bad Bridges and Bad Metro
Update on America’s hidden deficits: Nearly 56,000 bridges across the country are structurally unsound, according to the American Road and Transportation Builders Association (ARTBA), as reported by USA Today. More than one in four of the bad bridges are at least 50 years old and have never had major reconstruction work, according to the ARTBA analysis.…
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Chesterfield Finds $83 Million Unfunded Liabilities
Our society is riddled with unfunded liabilities. Nowhere is the magnitude of short-term thinking more egregious than the federal government. As case in point, the U.S. military has put off maintenance and repairs to the point where we don’t have the money for the military we have, much less the military we would like to have. “The…
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Quantitative Squeezing
It’s nice to see mainstream media highlighting an issue that I’ve been hammering here at Bacon’s Rebellion for a couple of years now. A front-page Wall Street Journal article discusses how the zero-interest rate policies of central banks around the world are crippling returns on pension portfolios, making it difficult for nations and municipalities to meet…
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This Is What a Fiscal Meltdown Looks Like, Part V: Big Legal Fees
As creditors close in and the City of Petersburg struggles to avoid default, it is spending large sums on legal and consulting fees. In the latest litigation, the city has hired the Richmond-based law firm Sands Anderson to fight an Oct. 4 order by a Petersburg Circuit Court Judge appointing a special receiver to ensure…
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No State Bailout for Petersburg
by James A. Bacon The City of Petersburg is on its own. There appears to be no sentiment in either the McAuliffe administration or the General Assembly for cutting the fiscally ailing city any slack. Even the city’s own representatives in the legislature aren’t pushing for any special treatment by the Commonwealth. “There is a…
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An Aging Economy Is a Sluggish Economy
by James A. Bacon Why is U.S. economic growth slowing? Perhaps for the same reason economic growth is slowing in Europe, Japan and other advanced economies — our populations are getting older. That was a major theme of my book “Boomergeddon,” written in 2010, when I accurately predicted that U.S. economic growth would fall short of…
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This Is What a Fiscal Meltdown Looks Like, IV: The State Intercepts Your Aid
by James A. Bacon The City of Petersburg’s fiscal meltdown is reaching a new crisis stage as an Oct. 1 deadline nears to make a $1.4 million payment to the Virginia Resources Authority (VRA), a state funding source for local infrastructure financing. In remarks to the Richmond Times-Dispatch following a House of Delegates Appropriations Committee hearing yesterday,…
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Boomergeddon Watch: Student Debt Relief
by James A. Bacon It should surprise no one that Hillary Clinton is advocating free college tuition and loan forgiveness for millions of students in an attempt to appeal to the Millennial vote. But the pandering of presidential candidates doesn’t begin to plumb the depths of perversity in the American political system. Now industry is joining the cause.…
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The 5,000-Year Sovereign Debt Bubble
by James A. Bacon Every financial bubble has its own unique characteristics. The late-1980s Savings & Loan Bubble was restricted mainly to anachronistic savings & loans institutions. The Internet bubble was limited mainly to tech stocks. The real estate bubble was tied mainly to mortgage finance. The common thread is that in each case, the powers…
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This Is What a Fiscal Meltdown Looks Like, III: Eating the Seed Corn
Poor Petersburg. Financial consultants are advising City Council to save $300,000 this year and $400,000 next year by shutting down three museums and two tourism centers as part of a draconian plan to slash a projected $12 million budget deficit and work down a $19 million backlog in unpaid bills. (Read the details in the Richmond…
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This Is What a Fiscal Meltdown Looks Like, II
by James A. Bacon The fiscal chickens are coming home to roost in Petersburg, which has racked up some $19 million in unpaid bills and is on track to run a $12 million deficit this year. The city is learning what happens when vendors are scared of not getting paid. Yesterday, we heard that Central Virginia’s regional…