Tag: Boomergeddon
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Quantitative Squeezing
It’s nice to see mainstream media highlighting an issue that I’ve been hammering here at Bacon’s Rebellion for a couple of years now. A front-page Wall Street Journal article discusses how the zero-interest rate policies of central banks around the world are crippling returns on pension portfolios, making it difficult for nations and municipalities to meet…
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This Is What a Fiscal Meltdown Looks Like, Part V: Big Legal Fees
As creditors close in and the City of Petersburg struggles to avoid default, it is spending large sums on legal and consulting fees. In the latest litigation, the city has hired the Richmond-based law firm Sands Anderson to fight an Oct. 4 order by a Petersburg Circuit Court Judge appointing a special receiver to ensure…
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No State Bailout for Petersburg
by James A. Bacon The City of Petersburg is on its own. There appears to be no sentiment in either the McAuliffe administration or the General Assembly for cutting the fiscally ailing city any slack. Even the city’s own representatives in the legislature aren’t pushing for any special treatment by the Commonwealth. “There is a…
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An Aging Economy Is a Sluggish Economy
by James A. Bacon Why is U.S. economic growth slowing? Perhaps for the same reason economic growth is slowing in Europe, Japan and other advanced economies — our populations are getting older. That was a major theme of my book “Boomergeddon,” written in 2010, when I accurately predicted that U.S. economic growth would fall short of…
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This Is What a Fiscal Meltdown Looks Like, IV: The State Intercepts Your Aid
by James A. Bacon The City of Petersburg’s fiscal meltdown is reaching a new crisis stage as an Oct. 1 deadline nears to make a $1.4 million payment to the Virginia Resources Authority (VRA), a state funding source for local infrastructure financing. In remarks to the Richmond Times-Dispatch following a House of Delegates Appropriations Committee hearing yesterday,…
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Boomergeddon Watch: Student Debt Relief
by James A. Bacon It should surprise no one that Hillary Clinton is advocating free college tuition and loan forgiveness for millions of students in an attempt to appeal to the Millennial vote. But the pandering of presidential candidates doesn’t begin to plumb the depths of perversity in the American political system. Now industry is joining the cause.…
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The 5,000-Year Sovereign Debt Bubble
by James A. Bacon Every financial bubble has its own unique characteristics. The late-1980s Savings & Loan Bubble was restricted mainly to anachronistic savings & loans institutions. The Internet bubble was limited mainly to tech stocks. The real estate bubble was tied mainly to mortgage finance. The common thread is that in each case, the powers…
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This Is What a Fiscal Meltdown Looks Like, III: Eating the Seed Corn
Poor Petersburg. Financial consultants are advising City Council to save $300,000 this year and $400,000 next year by shutting down three museums and two tourism centers as part of a draconian plan to slash a projected $12 million budget deficit and work down a $19 million backlog in unpaid bills. (Read the details in the Richmond…
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This Is What a Fiscal Meltdown Looks Like, II
by James A. Bacon The fiscal chickens are coming home to roost in Petersburg, which has racked up some $19 million in unpaid bills and is on track to run a $12 million deficit this year. The city is learning what happens when vendors are scared of not getting paid. Yesterday, we heard that Central Virginia’s regional…
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Playing the Racism Card… Just Pathetic
In other Petersburg-related follies… Petersburg Mayor W. Howard Myers has told fellow City Council members that the attacks on his leadership are motivated by racism and partisanship. “I will as a representative of Ward 5 and as major duly to my right hand, serve the public without blemish and from scare tactics from a few racists[s]…
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This Is What a Fiscal Meltdown Looks Like
by James A. Bacon Here’s what happens when you run a city government like Petersburg into the ground: The regional waste management authority is threatening to suspend its trash removal and recycling services unless the city commits to a plan to repay the $632,000 it owes. City residents and businesses have been paying their monthly…
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Debt to TVOP: A Fiscal Warning Flag for Virginia Localities
by James A. Bacon The financial travails of the City of Petersburg has prompted some readers to wonder if other Virginia localities are fiscal time bombs waiting to go off. There are many causes of fiscal dysfunction but one sure sign of trouble is a heavy burden of long-term debt. One way to measure that burden…
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Petersburg Narrowly Avoided Debt Default
by James A. Bacon The city of Petersburg’s financial woes are so bad that it nearly defaulted on a $4.5 million Revenue Anticipation Note (RAN) due June 30, but was saved at the last minute by a team of auditors dispatched by Secretary of Finance Richard D. “Ric” Brown. “It was questionable up to June 29,”…
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We’re All Hedge Funds Now
John Rubino, author of DollarCollapse.com, is my favorite financial blogger. He did some excellent reporting for Virginia Business magazine back in the day before he went on to become a successful author and financial pundit. In a recent post, he drove home a theme commonly expressed on this blog: that the near zero-interest rate policy pursued…
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Haywire in Haymarket
Looks like Petersburg is not the only Virginia jurisdiction to close the 2016 fiscal year with a deficit. This chart comes to Bacon’s Rebellion by way of Haymarket citizen Robert Weir. Haymarket, a town of less than 2,000 people in Prince William County, overspent by $789,000 — equivalent to a quarter of its revenue. Writes Weir: “It…