John Ransom sort of laid out the situation with Stockton, California and their bankruptcy. They have come up with a proposal that includes stealing $124 Million dollars from bond holders that bailed them out of the exact same mess that they were in, in 2007.
Apparently, in 2007, the City did not have the money to full the bloated Union Employee Pension Plan, so they issued bonds, (borrowed) for enough to make the contributions that were short.
Now, only 5 years later, they can’t meet their obligations so they declare bankruptcy and instead of moderating their obligation to the lavish pension plan, they propose to shaft the people that loaned them the money to fund the pension plan in 2007.
In addition to shafting the people that bailed them out, they have shorted the local taxpayers by cutting services.
Now that all can see how cities are going to treat their obligations, you can bet rates for all municipal, county and state bonds will go up, penalizing all of us.
More proof that public employee unions are Wrong!