Cities and states are unable to cope with the budget deficits they have created and are struggling to the point where some have filed for bankruptcy and some are becoming doubtful of their fiscal state.
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New York, NY (PRWEB) December 08, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that recent data records show that, since 1981, 42 U.S. municipalities have filed for bankruptcy; 10 of them in last four years. (Source: Global Research, July 19, 2012.) According to the Profit Confidential expert, with more and more cities and states struggling with their budget deficit and liabilities, the U.S. government may soon become the ultimate banker, adding more to the mounting $16.3 trillion U.S. debt.
“Cities and states are unable to cope with the budget deficits they have created and are struggling to the point where some have filed for bankruptcy and some are becoming doubtful of their fiscal state,” reports Lombardi.
In the article “42 Bankruptcies Later; Pace of Municipality Bankruptcies Increases,” Lombardi notes that the Illinois state pension is running out of funds to cover its obligation, reasoning that the state might need to draw funds from education, infrastructure, and local aid.
“Illinois is scrambling to deal with $83.0 billion in pension deficits and $8.0 billion in unpaid expenses,” says Lombardi. “With so many cities and states in trouble due to their vast budget deficits, the federal government may need to help them by stepping in and increasing its own budget deficit.”
“… the federal government didn’t let too-big-to-fail companies like AIG, Citigroup, and General Motors fail, so won’t it bail out its own cities and states?” asks the Profit Confidential expert.
Lombardi concedes that if the fiscal cliff is allowed to happen, personal income taxes would go up and government spending would go down. He concludes that while it would help the budget deficit, bailouts of cities and states facing major financial difficulties could easily sway the budget deficit in the opposite direction.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.