Sink Hole

Cities

Report: 63 out of America’s largest 75 cities can’t pay their bills, acquired $330 billion in unfunded debt

According to a recent analysis of the 75 most populous cities in the U.S., 63 of them can’t pay their bills and the total amount of unfunded debt among them is nearly $330 billion. Most of the debt is due to unfunded retiree benefits such as pension and health care costs. 

“This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion,” the third annual "Financial State of the Cities" report produced by the Chicago-based research organization, Truth in Accounting (TIA), states. 

The top five cities in the worst financial shape are New York City, Chicago, Philadelphia, Honolulu, and San Francisco. These cities, in addition to Dallas, Oakland, and Portland, all received “F” grades.

DYI:  During the next major economic downturn will not be in banking; the center will be State employee pension and health care retirement programs.  Over promises and underfunding has been the name of the game for decades and the chickens are coming home to roost as Boomer’s have now begun to retire.  This underfunding comes on the heels of a massively overvalued stock and bond market.  When this bubble bursts these sinkhole cities will end up filing for bankruptcy.  Simply put many participants in these pensions will have benefits marked down, taxpayers will pay far more and those holding the debt will end up with work outs along with outright defaults.

Medicare’s Trust Fund Is Set to Run Out in 8 Years. Social Security, 16.

The Medicare trust fund will be depleted in 2026, the administration said. By contrast, the government said last year that the trust fund would be exhausted in 2029. 

In a companion report, federal officials said the Social Security Trust Funds for old-age benefits and disability insurance, taken together, could be depleted in 2034, the same year projected in last year’s report. The fund that helps tens of millions of retirees is expected to be depleted a year earlier than projected last year, while the outlook for the disability trust fund is more favorable. 

More than 60 million people are on Social Security, Medicare or both. The two programs account for about 40 percent of all federal spending.

DYI:  Just as the political hot potatoes are getting warmed up during the State employee pension crises only in 8 years will Medicare’s trust funds run out.  Unless Congress steps in benefits for part A of Medicare [hospitalization] will have to lower by 75% placing the program back into financial balance.  Social Security trust funds will run out in 16 years with a reduction in benefits by 21%. 

To say the least it will be a hot time politically as the money will have to come from some where?  The most obvious place will be two fold the end of global military control and  hopefully this will also put a fire under who ever is in the White House to end the Medical Industrial Complex’s price fixing and monopolies dropping costs by 75%.

 DYI