Actuarial Outpost
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Finance - Investments
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

Finance - Investments Sub-forum: Non-Actuarial Personal Finance/Investing

Thread Tools Display Modes
Old 01-16-2017, 04:37 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 74,635
Blog Entries: 6

When Cities Are at the Financial Brink: The Case for "Intervention Bankruptcy"
Daniel DiSalvo Stephen Eide
January 12, 2017
Urban PolicyTax & BudgetPublic SectorReinventing Government

Many local governments today are on the verge of insolvency. Prominent examples include Atlantic City, New Jersey; the Chicago Board of Education; and Hartford, Connecticut.
For various structural reasons, including entrenched poverty and near-historical debt levels, many more cities are likely to suffer fiscal distress in the coming years. The risk of insolvency for large cities is now higher than at any point since the federal government first passed a municipal bankruptcy law in the 1930s.
But the recent experience of some bankrupt cities, as well as much legal scholarship, casts doubt on the effectiveness of municipal bankruptcy. To strengthen government’s ability to address municipal insolvency, this report argues that federal bankruptcy and state intervention, which are often posed as alternative approaches, should be combined. We call this approach “intervention bankruptcy.”
Crucially, state governments, whose consent is legally required for any locality to file for bankruptcy, should intervene at the outset and appoint a receiver before allowing a city or other local government entity to petition for bankruptcy in federal court. No municipal bankruptcy should be authorized if local officials will direct it.

Cities’ debt levels are near all-time highs, and the risk of municipal insolvency is greater than at any time since the Great Depression.
Recent experience with municipal bankruptcies indicates that when local officials manage the process, they often fail to propose the changes necessary to stabilize their city’s future finances.
Suggested legal changes to grant federal judges more power in municipal bankruptcies are, at best, uncertain to be enacted and are, in any event, ill-suited to this nation’s federalist structure.
Many fiscally distressed cities need operational reforms, in addition to less debt and a balanced budget. Stateappointed experts are best positioned to implement such restructuring programs.
Reply With Quote

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -4. The time now is 04:16 PM.

Powered by vBulletin®
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.13222 seconds with 9 queries