Jefferson County Approved for Largest Muni Bankruptcy
Alabama’s Jefferson County is fully eligible for a Chapter 9 bankruptcy protection filing and can proceed with its $4.23 billion case, the biggest ever by an American municipality, a federal judge ruled.
Overcoming arguments by creditors that the county was ineligible for bankruptcy protection because it had the wrong type of debt, U.S. Bankruptcy Judge Thomas Bennett issued a ruling late Sunday in Birmingham, Ala., saying the complex case can go ahead.
http://www.cnbc.com/id/46626333
''The economy is growing!'' - Obama
ha, sure bra, the level of employment is at its lowest since the 2nd world war but the economy is growing. haha keynesians fail again.
Or, you could understand why...
http://www.nytimes.com/2012/02/19/business/jefferson-county-ala-falls-o…
"Birmingham, which had thrived from Reconstruction to the mid-1960s as an iron and steel town, had been declining for years. Why not embark on a giant public works project, a Taj Mahal of sewage systems, to foster jobs and development?
Jefferson County began to borrow vast sums of money, but that money, it turned out, was a perfect medium for graft and contract-padding. Rather than replacing more than 2,000 miles of decrepit sewer pipes, the county dispensed contracts to build water treatment plants, pumping stations and administrative buildings, some on slag heaps left behind by closed steel mills.
All this debt was supposed to be paid off with revenue from the new sewer system — in other words, by fees the county would charge residents whose homes were hooked up to the system. As the debt grew, so did those fees — and the public outcry. By 2002, the average sewer bill in the county had doubled, to $18 a month.
One thing led to another. In an attempt to expand the system and add new ratepayers, the county tried to bore a giant tunnel beneath the Cahaba River, Birmingham’s main source of drinking water. But the tunnel was so unstable that the endeavor was abandoned. The county spent millions just to extract the boring machine, which had become entombed underground."
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