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Tuesday, October 5, 2010

Could Portland's debt and pension woes result in Oregon bond default?

That's one possible trajectory, especially since the state's credit is starting to look a little sick itself.

When the crunch finally hits, another possibility would be for the city to declare bankruptcy.

By then, Tri-Met will probably have been through bankruptcy first.

Comments (13)

Just following the Portland Water Bureau plan to bury us in debt so the bond holders take over the drinking water system. 47% increase in your water bills will be nothing. We told you so.....

I hear debt collectors callin
I know the end is coming soon
I fear the city is a fallin
I hear the voice of rage and ruin

Don't go around tonight
Well there's bound to be a fight
There's a bad council to blame.

Again apologies to John Fogerty

Just following the Portland Water Bureau plan to bury us in debt so the bond holders take over the drinking water system.

I'm skeptical on that one. The PWB is too much of a golden goose for stuffing with cronies and tapping for petty cash for unrelated projects. Plus, don't City employees get free or discounted water service? The party would definitely be over if PWB was privatized.

Sorry you're skeptical Eric ...but the current construction plans and debt are taking us there already. Default is not off the table if things continue as they are going. It is worth more broken up by different stakeholders and certainly more lucrative for "cronies" who don't have to answer to those pesky citizens who make trouble by asking questions like "why?".
We were close to it several years ago, and we are now again with more window dressing. Your PERS package probably won't be affected too much.

um, Eric, City employees do not get free water, or sewer service. We're stuck with the double-digit increases just like you.

Another thing to consider about governments going bankrupt - that would likely get them out of labor agreements, so they could cut pay and benefits drastically. I'm not sure where PERS would fit in all of this, but possibly employees would go from Tier I to the current, cheaper PERS tier.

However, a cautionary note - employees get blamed for what we make (yes, I'm a City employee) and the benefits we receive - but it's not us in-the-trenches types who are making oodles of money, or making decisions that leave entities on the precipice of bankruptcy. That honor resides solely with the electeds, and their top cronies in and out of government.

Umpire: "... but it's not us in-the-trenches types who are making oodles of money ... that leave entities on the precipice of bankruptcy."

Really? I don't know about that. Seems like at least 20% are doing pretty well.

See: http://theoregonpolitico.com/blog/2010/10/04/1-in-5-portland-city-employees-earn-six-figures-in-2009/

There are only two ways out, raise taxes or default. It is not like the state is doing much better with PERS. Fedgov can't bail us out because everyone else is in the same boat.

Default is the only realistic option.

The debate about austerity measures is going to be fascinating in such a progressive state. I do not have high hopes as hard times are coming.

For those tempted to run and hide elsewhere, are there really any states that aren't as messed up fiscally as this one? Just askin'

Don't want to say I told you so, but...

The Paulsons didn't move here for nutt'n. Almost every crisis in American history is related to the banksters running the country into massive debt:

> War of 1812 (Banksters talked the Brits into fighting us when we refused to renew the charter for the First Bank of USA)

> Civil War (Banksters talked the South into fighting the North when we refused to renew the charter for the Second Bank of USA)

> World War I (Banksters blackmailed Wilson into fighting after Germany and Britain were prepared to call it quits)

> World War II (Banksters funded both sides and blackmailed Britain into giving them half of Palestine)

> Today (Federal Reserve act of 1913 put us on a course of debt, debt, debt of which we are now in the end game)

Montana, Wyoming as guesses

More North and a bunch East:


We're not running and hiding...just reading the writing on the wall. No one is as stupid or greedy as this group of current incumbants.

>For those tempted to run and hide >elsewhere, are there really any states >that aren't as messed up fiscally as this >one? Just askin'

Some are better than others but I think it will take awhile for states that accept the fact that they are broke. States are still playing accounting games and refusing the accept reality. Oregon is still kicking the can down the road borrowing from the future hoping that there is some economic miracle that will preserve all of the govt excess.

I think the answer is to get out of debt, keep assets liquid and be ready to vote with your feet.

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