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Hasn't that ship long since sailed? One of the first "shameless" local bankruptcies of significant scale in the U.S. was that of Orange County, CA, a wealthy co
by _delirium 10y ago
Hasn't that ship long since sailed? One of the first "shameless" local bankruptcies of significant scale in the U.S. was that of Orange County, CA, a wealthy conservative suburb of Los Angeles, in 1994. They could have paid off their debts if they had wanted to, but their voters did not want to, and repeatedly voted down tax hikes to rapay the bonds. So they defaulted in 1994. This county is still one of the richest in the USA, and can today borrow without any problems, having suffered no real long-term consequences from their default.
- mobilefriendly 10y agoThe situation in Orange County isn't comparable to Puerto Rico. OC bought derivatives for leverage and wiped out their pension fund. Unlike PR, OC is generally well managed and has a vibrant private sector economy. The courts also forced OC to repay most of the defaulted money.
- prostoalex 9y agoConsidering that Orange County default was caused by local government's mismanagement of the public funds (via highly risky strategies and derivatives that had been banned since then), you can kinda-sorta-maybe see why the citizens didn't exactly line up to give even more of their money to the local government.