Detroit Schools on the Brink - WSJ.com: "Detroit's public-school system, beset by massive deficits and widespread corruption, is on the brink of following local icons GM and Chrysler into bankruptcy court...Some experts say the Detroit case could be the first in a string of Chapter 9 bankruptcies among school districts and other public entities battered by the economic crisis, and it could help shape that area of the law. "Given the state of public finance," says Samuel Gerdano, executive director of the American Bankruptcy Institute, "I think the wave is coming.""
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So do I. I think the private and public institutions of local government are on the edge of a cliff right now. Many state and local governments are facing insolvency right now. What does the future hold? The Obama administration is spending so much money that we, the taxpayers, will soon be faced with increased federal taxes. That will increase resistance to state and local taxation, so massive service cuts seem to be the only way they can go.
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But wait, according to the illustrious economic theorist Dick Cheney, "deficits don't matter".
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