Stockton's bankruptcy approved - SFGate:
"A federal judge on Monday granted Stockton's reluctant, nearly year-old request to become the largest city in U.S. history to go bankrupt, but not before lambasting bond creditors for stonewalling negotiations despite what he called "good-faith" efforts by the city to find a solution for its financial problems...Buoyed by tax income from the housing boom of the early 2000s, Stockton approved "overly generous" employment packages and ambitious projects, including a waterfront baseball stadium, Klein said. Then, he said, "what we now call the Great Recession" and foreclosures hit the city like a bomb. By 2011, unemployment reached 22 percent, property values plunged by more than half, and the city was in a "painful" hole, the judge said."
The way I see it, many if not most state and local governments, special districts, and homeowner and condo associations are all facing major financial challenges. There are many reasons for this, but the most basic problem is simple: all of them have their hands in the pockets of the American middle class, and there is a finite and dwindling amount of money there.