San Bernardino files for bankruptcy as officials admit to 'cash flow issue'

The Guardian

Southern Californian city of 210,000 people voted to choose Chapter 9 bankruptcy, following Stockton and Mammoth Lakes

San Bernadino's interim city manager said the city is
 facing a budget shortfall of $45.8m

Until last month, no city in California had opted for bankruptcy since 2008, and no US city of more than 200,000 people had ever decided to go down that route.

But the past two weeks have changed all that, as the fiscal struggles faced by so many American cities became too much for some to bear.

San Bernardino became the third California city in that small span to choose Chapter 9 bankruptcy protection with a city council vote on Tuesday night.

San Bernadino, which has about 210,000 people, will also become the second largest in the nation ever to file for bankruptcy. Stockton, whose population is nearly 300,000, became the biggest when it filed for Chapter 9 on June 28. The much smaller city of Mammoth Lakes voted for bankruptcy on July 3.

San Bernardino's city council directed the city attorney to make the move during a meeting where administrators explained the dire fiscal circumstances and urged them to choose the bankruptcy option.

"We have an immediate cash flow issue," interim city manager Andrea Miller told mayor Patrick Morris and the seven-member city council, according to the Los Angeles Times.

Miller said the city is facing a budget shortfall of $45.8m. It has already stopped paying some vendors, and may not be able to make payroll over the next three months.

Four council members voted for the authorization, two opposed it, and one abstained.

"This is probably the hardest decision this councilwoman will ever have to make in this chair," Wendy McCammack said, according to the San Bernardino Sun.

The councilman who abstained from voting, John Valdivia, said he did not trust the information presented at the meeting, and having only served since March believed he should not be held responsible for the money mess.

"The taxpayers of this city have been duped, hoodwinked and misguided for the past several years," Valdivia said, according to the Sun.

It was not immediately clear when the city planned to file.

Sixty miles east of Los Angeles, San Bernardino is in a region that soared economically during the housing boom but suffered after the crash.

It joins a number of other cities and counties across the nation that have plunged into financial crisis as the recession made it tough to cover rising costs involving payroll, pensions, bondholders and vendors.

Before Stockton, a California city had not filed for bankruptcy since Vallejo in 2008.

Since Congress added Chapter 9 to the bankruptcy code in 1937 to allow municipalities to seek protection, about 640 government entities have filed.

Social Security Garnished for Student Debts

DissidentVoice
Ellen Brown

Indentured Servitude for Seniors

The Social Security program…represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.
— President Jimmy Carter, December 20, 1977

[This law] assures the elderly that America will always keep the promises made in troubled times a half century ago…[The Social Security Amendments of 1983 are] a monument to the spirit of compassion and commitment that unites us as a people.

— President Ronald Reagan, April 20, 1983

So said Presidents Carter and Reagan, but that was before 1996, when Congress voted to allow federal agencies to offset portions of Social Security payments to collect debts owed to those agencies. (31 U.S.C. §3716).  Now we read of horror stories like this:

I’m a 68 year old grandma of 2 young grandchildren. I went to college to upgrade my employment status in 1998 or 1999. I finished in 2000 and at that time had a student loan balance of about 3500.00.

Could not find a job and had to request forbearance to carry me. Over the years I forgot about the loan, dealt with poor health, had brain surgery in 2006 and the collection agents decided to collect for the loan in 2008.

At no time during the 6-7 year gap did anyone remind me or let me know that I could make a minimum payment on the loan. Now that I am on Social Security (have been since I was 62), they have decided to garnishee my SS check to the tune of 15%.

I have not been employed since 2004 and have the two dependents ….  I don’t dispute that I owed them the $3500.00 but am wondering why they let it build up to somewhere around $17,000/20,000 before they attempted to collect.

Her debt went from $3500 to over $17,000 in 10 years?!  How could that be?

35 Statistics That Show The Average American Family Has Been Broke Down, Tore Down, Beat Down, Busted And Disgusted By This Economy

EndoftheAmericanDream

The economic statistics that you are about to read are incredibly shocking, but they are also very, very real.  Tonight there are going to be millions of men and women all across America that cannot sleep because they are consumed with anxiety about their financial problems.  Even as you read this, there are a lot of parents out there that are trying to figure out how to explain to their children why their homes are being taken away.  There are also hordes of very hard working Americans that are incredibly frustrated because they have sent out thousands of resumes and yet they can't seem to get a job interview.  Have you ever been at a point where you couldn't pay the mortgage or put food on the table for your family?  It can be an absolutely soul-crushing experience.  In fact, there are some cities in the U.S. that have been so utterly devastated by this economy that it seems as though virtually everyone has had the hope sucked right out of them.  The mainstream media is trying to convince all of us that we are in an economic recovery, but that is a lie.  The truth is that we are in the middle of a long-term economic decline and the greatest economy in the history of the world is dying right in front of our eyes.


The average American family is under more economic stress right now than at any other time since the Great Depression.  Just check out the following statistics....

#1 Only 45.4% of Americans had a job during 2010.  The last time the employment level was that low was back in 1983.

#2 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in U.S. history.

#3 In the United States, one-fourth of all the income is brought in by 1 percent of the people.

#4 Rising prices are putting an incredible amount of stress on American family budgets.  According to John Williams of Shadow Government Statistics, if the U.S. government measured inflation the way that it did before 1980 the inflation rate would be much different.  For example, Williams says that inflation rose at a 9.6 annual rate during the month of February using the old measurement.

#5 In a recent survey conducted by Deloitte Consulting, 74 percent of Americans said that they planned to slow down their spending in coming months due to rising prices.

#6 The price of U.S. crude oil has risen $20 a barrel over the last two months, and the average price of a gallon of gasoline in America is now about $3.79.  At this point, the average price of gasoline is about one dollar higher than it was one year ago.  Since the average American household goes through about 750 gallons of gas a year, that means that in 2011 American families will spend somewhere around $750 more for gas.  So just what is the average American family supposed to do if a gallon of gasoline soon costs 4 or even 5 dollars a gallon?

#7 The average American now spends approximately 23 percent of his or her income on food and gas.

#8 Incredibly, 60 percent of all the students attending California public schools now qualify for free or reduced-price school lunches.

#9 The number of people on food stamps in the state of North Carolina has almost doubled over the past four years.

#10 Thanks to the globalization of the economy, U.S. workers now must directly compete for jobs with workers in places such as Indonesia.  In Indonesia, full-time workers make as little as two dollars a day.  So how are American workers supposed to compete with that?

#11 U.S. home values have fallen an astounding 6.3 trillion dollars since the peak of the real estate market in 2005.

#12 Back in 2005 at the peak of the housing bubble, the median property tax on a home in the United States was $1614.  Today, even though home values have sunk like a rock, that figure has risen to $1917.

#13 According to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments at this point.

#14 31 percent of the homeowners that responded to a recent Rasmussen Reports survey indicated that they are "underwater" on their mortgages.

#15 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months.  Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.

#16 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#17 According to a recent census report, 13% of all the homes in the United States are sitting empty.

#18 According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years.

#19 According to the U.S. Bureau of Labor Statistics, the average length of unemployment in the U.S. is now an all-time record 39 weeks.

#20 There are 10% fewer "middle class jobs" in the United States today than there were a decade ago.

#21 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

#22 Half of all American workers now earn $505 or less per week.

#23 Total U.S. credit card debt is more than 8 times larger than it was just 30 years ago.

#24 Americans now owe more than $904 billion on student loans, which is a new all-time record high.

#25 Average household debt in the United States has now reached a level of 136% of average household income.  In China, average household debt is only 17% of average household income.

#26 A staggering 25 percent of all American adults now have a credit score below 599.

#27 1.5 million Americans filed for bankruptcy in 2010.  That represented the fourth yearly increase in bankruptcy filings in a row.

#28 Over the last decade, the number of Americans without health insurance has risen from about 38 million to about 52 million.
\
#29 One study found that approximately 41 percent of working age Americans either have medical bill problems or are currently paying off medical debt.

#30 According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of all personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

#31 Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid.

#32 According to the Federal Reserve, between 2007 and 2009 median household net worth in the United States fell by 23 percent.

#33 The Federal Reserve also says that median household debt in the United States has risen to $75,600.

#34 According to the Economic Policy Institute, almost 25 percent of all U.S. households now have zero net worth or negative net worth.  Back in 2007, that number was just 18.6 percent.

#35 During this most recent economic downturn, employee compensation in the United States has been the lowest that it has been relative to gross domestic product in over 50 years.

20 Shocking New Economic Records That Were Set In 2010

By Michael Snyder
Blacklisted News

2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline. The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month. Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs. What a mess! In fact, even many of the “good” economic records that were set during 2010 were indications of underlying economic weakness. For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value. Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.

So will things improve in 2011? That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy. The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.
Amazingly, many of our politicians and many in the mainstream media have declared that “the recession is over” and that the U.S. economy is steadily improving now.

Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below. That should shut them up for a while.

The following are 20 new economic records that were set during 2010….

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.

#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009. This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#5 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.

#7 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.

#9 Government spending continues to set new all-time records. In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.

#10 The number of Americans on food stamps surpassed 43 million by the end of 2010. This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping. But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

#13 According to the FDIC, 157 banks failed during 2010. That was the highest number of bank failures that the United States has experienced in any single year during the past decade.

#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010. They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve’s continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.

#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.

#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.

#17 In July, sales of new homes in the United States declined to the lowest level ever recorded.

#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006. Amazingly, this is even farther than house prices fell during the Great Depression. From 1928 to 1933, U.S. housing prices only fell 25.9 percent.

#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.

#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.

There are some people that have a hard time really grasping what statistics actually mean. For people like that, often pictures and charts are much more effective. Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year. It shows the growth of the U.S. national debt from 1940 until today. I honestly don’t know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown….