Via a report on Watchdog, analysis of the 75 most populous cities in the U.S., shows that 63 of them can’t pay their bills. The total amount of unfunded debt among them is nearly $330 billion. Most of the debt is due to unfunded retiree benefits such as pension and health care costs.
Financial State of Cities
“This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion,” the third annual “Financial State of the Cities” report produced by the Chicago-based research organization, Truth in Accounting (TIA), states.
Bottom 35
Top 5 Cities
Grading the Cities
- A grade: Taxpayer Surplus greater than $10,000 (0 cities)
- B grade: Taxpayer Surplus between $100 and $10,000 (12 cities)
- C grade: Taxpayer Burden between $0 and $4,900 (24 cities)
- D grade: Taxpayer Burden between $5,000 and $20,000 (31 cities)
- F grade: Taxpayer Burden greater than $20,000 (8 cities)
Truth in Accounting’s grading system for the 75 cities gives greater meaning to each city’s Taxpayer Burden or Taxpayer Surplus. A municipal government receives a “C,” or passing grade, if it comes close to meeting its balanced budget requirement, which is reflected by a small Taxpayer Burden. An “A” or “B” grade is given to governments that have met their balanced budget requirements and have a Taxpayer Surplus. “D” and “F” grades apply to governments that have not balanced their budgets and have significant Taxpayer Burdens.
What a miserable report.
The most shocking thing is not how bad the worst cities are, but rather some cities in California actually appear to be solvent.
By State
The above analysis is by city. Also consider State Level Liabilities.
Bottom Five
- New Jersey: -64,000
- Connecticut: -53,400
- Illinois: -50,800
- Kentucky -39,200
- Massachusetts: -33,500
Congratulations Chicago!
On a combined liability basis, Chicago is the winner. Each Chicagoan owes the state $50,800 and the city an additional $36,000 for a total of $86,800 per capita.
New York City residents “only” owe $21,500 to the state plus $64,100 to the city for a grand total $85,600 per capita.
Second City No More!
Mike “Mish” Shedlock
This is part of the Great Reset coming in the 2020s.
Okay, we understand the trend of govt’s promising what can’t be paid for (including unsustainable pensions), and extracting unsustainable taxes to keep the Ponzi scheme alive. We also know the govt will NEVER look in the mirror and admit their mistakes. Since the average Joe does not hold govt accountable until it’s too late, one should also understand where this road ends.
The sign posts are well marked all over the world, and history is very clear that we are headed toward revolution and the likely succession of many states, unless direct taxation is ended.
As the hunt for money and direct taxation increases, capital will flee, leaving the masses that can’t move fighting for the scaps. Cycle analysis says the financial capital of the world will move to China after 2032. If anyone doubts this forecast, please explain who in their right mind would even run for office after witnessing the hatred and personal attacks on Trump? There is absolutely NO way anyone will ever come to power who would actually try to help the situation. Trump is a dead cat bounce. Only career politicians and other establishment hacks will run, and these people NEVER look at the cycles. Instead, they look to line their pockets.
The other trend that will aggravate the economic and societal reset is the cooling cycle, caused by the reduced energy output of the sun, which is also cyclical. The resulting crop failures and rising commodity prices after 2020 will once again produce famines and plagues. Instead of preparing for nature’s cycles that CANNOT be changed, too many are doing the exact opposite of what’s needed. If people do not realize what is happening, our own complacency will be our doom.
The Yellow Vest protestors have been at it for three straight months. As our economy deteriorates, I hope Americans will get off the couch and focus their protests on the root of the problem – career politicians, big govt and direct taxation.
Totally agree. My shorthand: We get the government we deserve.
Its not all apples to apples as I believe nyc includes teachers
You can in effect owe money to the state the county the city the school district the water district
Short history of Socialism: famine, economic collapse, mass murder.
That has zero to do with Socialism.
I suggest you consider events in the USSR, China under Mao, Cambodia under Pol Pot, Korea under Kim Jung Il and Un, Cuba under Castro, Germany under Hitler, recent Venezuea, ad nauseum. Wake up! Our Socialists are no different from the Socialists of old. They just have a later start and haven’t had a chance to make a real mess of things…yet. It never ends up any different.
I suggest you stop thinking so hysterically. Do you think the kind of Socialism seen in Canada, the UK or Germany is setting them up for the next genocidal maniac such as you listed??? You’re unhinged. Find a good therapist.
Canada, UK and Germany are NOT socialist countries, they are capitalistic countries that have a generous welfare system for the poor.
Right, but right wingnuts here refer to that as Socialism. You know, to scare stupid people into voting against their own self interests.
The black hole of Socialism, caused by the relentless increase in taxes and govt malfeasance, reduces economic activity, which produces higher unemployment, civil unrest, and suicides. Whether it produces mass murder and famine depends on how strong a grip the govt takes. As Gerald Celente says, when the people lose everything and have nothing left to lose, they lose it.
Four years ago the Left in all the countries you mention were lauding Hugo Chavez for his fantastic progress in Venezuela. It’s all good until it isn’t. The whole west is loaded up with unsustainable debt to pay for unsustainable Socialist promises. When standards of living start to fall things can go bad very quickly. How many times does it have to happen?
70% of business in Venezuela is privately held. You can barely spell Socialism, forget knowing what it actually means.
Socialism includes things like Maduro telling companies how much they can charge for their products in essence forcing them to sell for a loss which led to companies lowering their production.
Maduro’s answer to this was wholesale confiscation of products for free which led to many companies stopping production all-together since government can not confiscate that which has not been produced.
In addition to being a crazed socialist Madure is also economically illiterate fool.
So let’s for a minute assume we’re smarter than Maduro and about as smart as the Canadians? Then let’s wonder why Canadians don’t demand the unfettered style of Capitalism practiced here. They seem to like what they have just fine. But that escapes you, right?
Oh, and ten years ago capitalistic model America would have collapsed but for trillion dollar bailouts from the Fed while Socialist Canada got along just fine. But hey, stay stupid. Makes it easy to play with you.
Canada’s real estate bubble is worse than anything USA had and while the debt bubble in USA partially deflated in 2008-2009 Canada’s debt bubble kept on increasing.
Maybe they’re just smarter than us. I remember talk of a bubble in Southern California real estate. In the 1980’s. It seems that Canada’s less corrupt, fairer, more Socialistic society appeals to people who can afford to live there. Just like California. Get it? I’m sure you don’t.
Heck, Chavez and Maduro managed to bring starvation to a country with $50,000,000,000,000 worth of oil in the ground.
I see the Green New Deal, single payer healthcare and universal basic income in our future. It will bring us to our knees.
Giant corporations milking the public by government bail out and favorable regulation is not capitalism either. It is more akin to Fascism.
Add in the national -$65000 per head. Don’t forget the feds. Much worse if you count the unfunded liability.
New York, Chicago, Philadelphia and San Francisco all welcome illegal immigration.
So them having their finances a complete mess is likely not a coincidence.
Abend, how is IBM’s pension plan doing?
Can’t say. I left them in 1972. Great company. I’ve noticed in recent years that their worldwide headcount has gone up while North American headcount has gone down. More IBMers in India now than the entire company when I joined.
IBM= Indian Business Majors
2banana’s Rule:
Democrat rule + public unions + free sh*t army = misery, ruin and bankruptcy
You forgot crony capitalism, reduced regulations allowing unfettered greed among corporate elites and massive unaccounted war spending. Fool.
As Joseph Goebbels would say Bobnoxy is “Führer Rhein”. The nazi party was the NSDAP…that means national “socialist” german workers party” and that accurately depicts the current fringe that is capturing the democrat party today. Try harder Bob.
If I did you’d be even more lost than you are now. Socialism the gateway drug to Communism? You must be another gullible Trump voter.
And Chicago hasn’t even built Obamaland yet.
Abend were you an IBM mainframer programmer?
I recalled that number but I had to look it up
https://www.mail-archive.com/ibm-main@bama.ua.edu /msg35292.html
Hi Mish, yes. I joined IBM in the late 60s during the 360 mainframe push. I was a bugshooter in the Field Engineering group, Los Angeles. It was a great time to learn the system, if it didn’t kill you. The 237-04 abend was one of the meanest bugs, but looking back I learned to love it because it forced me to learn a lot in a hurry. You had to bring data and thoroughly understand the problem, kinda what I like about your blog. Keep it up!
S0C4 could be a very bad one – Memory overlay if I recall correctly
S0C7 was usually easy to figure out- attempt to treat a non-number as a number
Ha! The scariest ones for me were when the system ran a job to completion with undetected errors, or ran hours long for no apparent good reason, like many politicians…
Thanks for that factoid Abend
Mish, I’d point out that the two California cities, Irvine and Fresno, are both in Republican counties and have been managed responsibly. Our new governor is moving early to change that. He filed suit against Huntington Beach, also in Orange county with Irvine, last week for not building enough low income housing. Gotta get at those responsible outliers before they become a trend…
Fresno County pensions are far underwater so I’m not sure the political spin is that strong there