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Central Falls, Rhode Island Files Bankruptcy

From a non-dot connecting Reuters:

Rhode Island’s Central Falls files for bankruptcy

By Scott Malone
August 1, 2011

CENTRAL FALLS, Rhode Island (Reuters) – Central Falls, Rhode Island, one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession, filed for a rare Chapter 9 bankruptcy on Monday.

The bankruptcy filing, a risky and potentially expensive move that could freeze the city out of the U.S. municipal bond market, marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

The smallest city in the smallest U.S. state made the filing as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million

The word ‘union’ only appears once in this article – in the final paragraph – and then, just in passing.

In Central Falls, a city of just 19,000 located six miles from the state capital of Providence, residents reacted to the news with disappointment and resignation…

Ulysses Ortiz, a 50-year-old retiree, said whatever budget cuts will be imposed would hurt residents, who have already borne the brunt of heavy budget cutting

And God knows, we don’t want those 50 year old retirees to suffer.

Central Falls, which has been under state control since July 2010, has $21 million of outstanding debt, Moody’s said… Earlier this year, the state passed a law that guarantees bondholders will be paid before a distressed city like Central Falls deals with its other obligations. It was not immediately clear whether the law would hold up in bankruptcy court.

Rhode Island Governor Lincoln Chafee said the situation is "dire" and requires "decisive" action.

"Everything was done to avoid this day," said Central Falls’ state-appointed receiver, retired judge Robert Flanders, Jr. "Taxes have been raised to the maximum level allowable. We negotiated with…the police and fire unions, without success, attempting to reach voluntary concessions, and we tried in vain to persuade our retirees to accept voluntary reductions in their benefits," he said.

Yes, as we reported back on July 21st, these public sector union retirees – many of whom are only in their forties and fifties — were asked to give back some of their monthly pensions to prevent this.

They said ‘no.’ So let them reap the whirlwind.

But why isn’t the news media trumpeting this town as a microcosm of things to come for the rest of America?

This article was posted by Steve on Tuesday, August 2nd, 2011. Comments are currently closed.

8 Responses to “Central Falls, Rhode Island Files Bankruptcy”

  1. Rusty Shackleford says:

    “But why isn’t the news media trumpeting this town as a microcosm of things to come for the rest of America?”

    Because the socialists are not self-critiquing. Any/all problems with anything has to be the fault of their most-hated enemies or unforeseen circumstances, hence the constant buzzing of the word “unexpectedly” in the newspaper articles about unemployment.

    But to borrow from Sir Arthur Conan Doyle, I must submit, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

    And also: “It is a capital mistake to theorize before one has data.”

    However, socialists have no problem destroying that axiom by data manipulation to meet a pre-desired agenda, as is the case with AGW and their “argument” that “noted scientists” support it with “incontrovertible” evidence.

    But the first axiom is especially needed by socialists, for they cannot ever seem to fit their beliefs into the realm of logical thought processes and fact analysis. They only have their emotions and lexicon of buzzwords and phrases to advance their agendas. Fortunately, conservatives outnumber them 2-1 but….unfortunately, the number of socialists and panty-waste elite ruling class snobs run our government. And they all think they’re somehow superhuman and uber-intelligent. Add to that the years and years and years of stale, bleached arguments they come up with to justify their poor management skills.

    Had words with a clown yesterday who didn’t like my criticism of Captain Skidmark. He naturally called me a racist and I said, “I never once mentioned race, you did. I simply pointed out that we have close to 10% unemployment, no banks giving out loans, gas prices ridiculously high and well, if you think you’re safe in blaming Bush for all that, think again, slick.” He walked away shaking his head. He was about the same age as me but I got the impression he just couldn’t let go of the racist position. Evidently, there are a great many people who lead with their emotions, not their minds. But that’s socialist behavior in a nutshell. Feel first, then let the argument build itself. Don’t let rational, well-based arguments sway you from your emotional mission, which is to make someone else feel pain. No, engage in that self-gratification of sticking it to someone and punish them for being an individual and most of all, for disagreeing with you.

    • proreason says:

      “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”

      Yet, the marxists have tried “everything” to spark the economy. Even a lot of middle-of-the-road commentators agree. The government has tried everything.

      Except lowering taxes on small businesses, or taking the regulation handcuffs off businesses, or allowing drilling, or defunding Obamycare, or cutting government spending which sucks capital out of the markets, or clamping down on unions, or shutting down handout welfare, or letting Government Motors go private since propping it disadvantages automotive entrepreneurs, or returning unpaid stickittous funds to the people, or undoing the $1T in governement spending added on the Criminals watch, or or or or.

      The “everything” they have tried is the everything that expands their own power.

    • tranquil.night says:

      How do you engage that which is constantly only looking to subvert?

      Socialism (or Progressivism) aren’t coherent logically, like Rusty put it well. At its bottom rungs consist of people who want the freedom and security of a modern lifestyle without working or paying for it. Meanwhile, the most powerful socialists, the global elite Marxists, are also the most avaricious (crony) capitalists, many who cross all bounds of law and ethic to accumulate their wealth and spread their influence. They create the socioeconomic and cultural conditions which collapse the sovereign currencies while reaping the value off both sides of the cliff. They actualy are the bogeymans of the dark side of capitalism which they characterize and malign to get everybody to hate the system.

      So where do you even get in the arena of ideas with people like this? Once upon a time America didn’t participate in these types of economic shenanigans but now we are almost completely dependent on them. How do you even spur job growth when you can’t even get a bill considered staying the whips of the bureaucracies and unions that are tormenting the job creators, everything from the EPA to HHS? It’s a leviathan, and it doesn’t want to negotiate with us. It’ll scream and roar from each head with every little cut we deliver.

  2. BannedbytheTaliban says:

    $80 million! Does the entire town work for the government. Could they not do simple math. That is over $4200 per person, and since there is only about 48% of the population working (nationally), almost $9000 per tax payer. Did they not realize that is unsustainable, are they really that stupid?

    Also, the argument that the average person is going to be hurt by spending cuts doesn’t pass the smell test. I can’t think of a single thing my state government provides for me with income tax money, or sales tax revenues. Roads, come from gas tax, police/fire come from property tax, other than that there is nothing I need from state government. Where does the money go?

  3. Rascal says:

    Remember, this is the same town that fired its teachers because they wouldn’t spend 25 minutes extra a day working with remedial students unless they were paid more: something the school district and the town couldn’t afford. It also has–at least at the time–a 50% graduation rate and was noted as the worst school district in the state. Now do we all understand why the press won’t publish this?

  4. JohnMG says:

    Not to worry–Uncle Sugar to the rescue. Now, Obama will reassure them that all they have to do is borrow some money, raise some taxes, and pay their young retirees’ pensions so they can take more vacations, etc.

    It was ‘evil Bush’ to blame and that other Republican(?) Lincoln Chaffe.

  5. kennyg7 says:

    This is a great train wreck.I want to see how this ends up for the public employees.With no bailouts available I don’t see how they are going to pay the contracts. This will be a good poster child for us to use against the left.

  6. Anonymoose says:

    This retire at 40 something is a holdover from the days when the life expectancy was in the late 50’s and 20 years of being a cop or working in construction would leave a person used up. Today I’m seeing more and more people who use this as a game to “retire” and get a steady paycheck when they’re still productive, and get another job altogether to be that much wealthier. Why the do they need a retirement if they’re still working? I’m in my mid-forties and may not be able to retire until I’m 70, so for all these 50 year old retirees living off the fat of the land…..it’s all used up.

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