Frugal Café Blog Zone

Posted By Vicki McClure Davidson on February 4, 2010

Harrisburg, capital of Pennsylvania, may be filing for bankruptcy

And the bad economic news — during the Age of Obama — keeps rolling in…

From Bloomberg, Pennsylvania State Capital Mulls Bankruptcy as a Budget Option:

Harrisburg, the capital of Pennsylvania, will consider Chapter 9 bankruptcy protection along with tax increases and asset sales as options to address $68 million in debt service payments due this year, the chairwoman of a City Council committee said last night.

Every option, including tax and fee increases, bankruptcy and a state takeover through Pennsylvania’s Act 47 municipal oversight program will be considered, said Susan Brown-Wilson, chairwoman of the Budget and Finance Committee, which began a week of hearings last night to consider a 2010 spending plan.

The $68 million in debt service payments that Harrisburg faces in connection with the construction of a waste incinerator this year is four times what the city of 47,000 expects to raise through property taxes, and $4 million more than the city’s entire proposed operating budget.

From PennLive: Dauphin County says it won’t pay Harrisburg’s share of incinerator debt:

If Harrisburg officials are counting on Dauphin County to swoop in and make some of the city’s debt payments on the incinerator, they need to think again. The city may not be able to meet payroll this month because it’s on the hook to pay some of the Harrisburg Authority’s estimated $288 million incinerator debt.

The city, under Pennsylvania’s Early Intervention Plan, turned to the consulting firm Management Partners to help officials find a way out of the financial woes. One of the 21 recommendations the firm made was arrange with Dauphin County to make the city’s debt-service guarantee payments.

It appears that the county will do what it has to do, but not much else.

From Business Insider: It Begins: Cash Strapped Cities Begin To Crumble:

Our nascent economic recovery may come too late to save many American cities from bankruptcy, which in turn will deal heavy losses to municipal bond investors and the companies that insure munis.

The latest fright comes from Harrisburg, the capital of Pennsylvania. The city is considering seeking bankruptcy protection—as well as tax hikes and asset sales—to address $68 million in debt service payments due this year.

Harrisburg does not stand a chance at making its payments. The $68 million in debt service payments is four times what the city expects to raise through property taxes and $4 million more than the city’s entire operating budget.

From HotAir: Obama: “Every economist” says I saved or created 2 million jobs:

Jake Tapper is a little confused, and so am I. The White House supposedly abandoned the “saved or created” jobs metric because of its fantasy elements and prefers now to count jobs “funded” through Porkulus, an order that came from one of the chief economists in the White House, Peter Orszag. So why did Obama claim to a Nashua, New Hampshire audience on Tuesday that he had “saved or created” two million jobs?

“Now, if you hear some of the critics, they’ll say, well, the Recovery Act, I don’t know if that’s really worked, because we still have high unemployment,” the president said. “But what they fail to understand is that every economist, from the left and the right, has said, because of the Recovery Act, what we’ve started to see is at least a couple of million jobs that have either been created or would have been lost. The problem is, 7 million jobs were lost during the course of this recession.”

Every economist? A good rule of thumb to consider the truthfulness of any speaker is his use of the terms always, never, none, all, and every. Those terms usually provide a key for a lie or a gap in knowledge — and Tapper points out the truth…

And I know of at least one economist, the brilliant Thomas Sowell, who has not said any such thing, Mr. President.

Related:
Hot Air: Guess what rose “unexpectedly”?
The Conservative Pup: We’re Not Mad At The Banks Mr. President…
Stop The ACLU: Democrats: What’s The Plan? Obama: A Rousing Speech!
Gateway Pundit: Breaking: Unemployment at 9.7% – New Counting Method Saved or Created 541,000 Jobs and The Obama Disaster– Only 11% Say Economy Better Since Dems Passed $787 Stimulus and Nevada Governor Slams Obama: “Doesn’t He Know That Thousands of Vegas Families Are Suffering Because of His Failed Policies?” and Limbaugh: I Thank God Every Day That Obama’s Agenda Is Going Down the Tubes and Leading Democrat: “We’ve Got to Spend Our Way Out of This Recession” (Video) and McCain Seen Mouthing “Blame It On Bush” During Obama’s Hyper-Partisan Attack Speech and Dem Rep Admits: “We’re Told to Call It a Jobs Bill Not a Stimulus Bill”
Le·gal In·sur·rec·tion: No Offense to the Clueless
No Runny Eggs: How much of the deficit is Obama’s fault?
GayPatriot: The Contradiction at the Heart of Obama-ism
Michelle Malkin: “Pay as you go” = Delay as you go; Update: House embraces $14.3 trillion debt ceiling, 217-217
CNN Money: Urban Unemployment Grows

Categories: Business & Economy, Government, Social and Political Climate
Tags: bankruptcy, budget option, Chapter 9, economic crisis, economic hardship, economist, financial hardship, Harrisburg, Harrisburg bankrupt, Pennsylvania, recession, Thomas Sowell