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Scranton Mayor Slashes All Public Worker Wages To $7.25 Per Hour, Including Police, Fire, His Own; City Effectively Bankrupt

Monday, July 9, 2012 - 6:01 PM
If MISH is right...  belts will get tighter.  His daily posts are worth consideration IMO.
Scranton, Pennsylvania's, the state's sixth-most-populous city (population of 76,089 in 2010 census), is down to its last $5,000 and has no way to pay salaries.

The mayor wants an immediate tax hike of 29% and 78% over three years. In every sense of the word, Scranton is bankrupt.

NPR reports Scranton's Public Workers Now Paid Minimum Wage

MikeMike327 posts since
Feb 22, 2010
Rep Points: 876
1. Thursday, July 12, 2012 - 8:10 PM
Mike:  Thanks for sharing the info about Scranton.  It was on the news tonight that it is probably going to file for bankruptcy and they mentioned a couple of other cities in California in the same position.  This perked my couriosity about other states in the US and what shape they are in.  I found eleven other states which are bankrupt.  This makes me wonder what happens if we have CDs with banks or credit unions in these states.  Should we be concerned?  I have no idea how the FDIC insurance etc. works if a state files for bankruptcy.  Are we still covered?  If anyone has any information they can share about this, I would appreciate knowing where we stand.  Since this has to do with our finances, I think it is a topic worth discussing in Ken's Forum.  Thanks for any information you can share.
paoli2paoli21,401 posts since
Aug 10, 2011
Rep Points: 6,135
2. Friday, July 13, 2012 - 7:36 AM
ninissniniss60 posts since
Sep 22, 2010
Rep Points: 154
3. Sunday, July 15, 2012 - 12:23 PM

I think you're mixing up municipal bonds, instruments issued by governments, and CDs, where the money you invest goes to solely the bank or credit union's operations.  If you owned a bond issued by a bankrupt government, you'd be in line to get paid first.  How much you'd get back is based on the government's assets and what the bankruptcy judge says.

The FDIC, NCUA, and other financial asset insurers would not have a say, because they don't cover municipal bonds. 
carthellcarthell1 posts since
Jul 15, 2012
Rep Points: 1
4. Sunday, July 15, 2012 - 12:49 PM
carthell:  Your post seems correct since the FDIC insurance is a Federal insurance.  Thanks for clearing it up for me and since I don't buy municipal bonds etc. nothing  I have should be at risk.  Much appreciation.
paoli2paoli21,401 posts since
Aug 10, 2011
Rep Points: 6,135