Two consequences of critical municipal budgets
High net worth investors and ordinary citizens both are feeling the effects of municipal budget crisis’s.
This week the city of Tracy CA will start charging its residents up to $300 to call 911 in an emergency.
At the same time, corporations and investors who have lent money to local governments by purchasing municipal bonds are warned that a “bloodbath” of government bankruptcies might wipe them out. “At least some classes of bondholders must share in losses along with other creditors,” the rating agency Fitch said.
An attorney working on the credit crisis of one city considering bankruptcy said: “Any plan is going to impair all classes of creditors, including bondholders.”
