The spendthrift welfare state policies of Greece, Spain and Portugal and their European cousins have accomodated continuing over-leverage in the US because the sovereign debt problems across the pond have made the US Dollar appear to be a much safer bet than the Euro. There will come a time when the Eurozone shrinks (a likely outcome), Europe rises out its second recessionary dip and/or the confederation enforces fiscal discipline. That's when anyone caught with big debt in the US is going to be in a heap of interest rate trouble, and/or US inflation will surge.

OTOH:

http://news.firedoglake.com/2011/12/27/demand-for-us-debt-up-inflation-down/

...and a tidbit from the Noah Diaries on Down With Tyranny:

"4/10/11 -- Do you think only bottled-water companies like Perrier are buying up aquifers?

Why am I not surprised that no one in the media has made the connection when an oil baron like T. Boone Pickens buys up water aquifers at the same time that energy companies are trying to buy off politicians left and right so they can indulge in the natural-gas drilling technique of fracking, which may well result in chemicals permeating our tap water so much that you can set it on fire right in the glass? What better way to corner the market on drinkable water supplies and present us with a future where we have to pay exorbitant prices for water by the gallon, just like gas at a gas station?"

http://downwithtyranny.blogspot.com/2010/12/noah-diaries-2011-9-why-do-republicans.html

Scroll down a bit.

Matt Taibbi's coverage of Jefferson County, Alabama in Rolling Stone is crucial for anybody who really wants to know about the global economic meltdown. It should be required reading for political candidates so they are better prepared to deal with financial issues and don't just regurgitate Fox Business News talking points.

Start with the March 31st, 2010 article called, "Looting Main Street - How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece"

Clackamas County in Oregon has joined in the Christmas spree
by our very own Portland Water Bureau. PWB couldn't resist slipping in a $35 million project at Bull Run Dam 2 (source of Portladnd's drinking water). The proposed project (contracted to
Black & Veatch almost 2 weeks ago and supported unanimously by
Portland City Council) is now under hearing process review in
Clackamas County started right before Christmas. NOT SURPRISINGLY, the hearing officer that is the official decision
maker is in direct conflict of interest since he has also been hired by the City of Portland as a hearing officer in the past. His name is
Kenneth Helm. The review will determine whether conditional
use permits will be given by Clackamas in order for PWB to proceed with construction. Citizens for Portland's Water were
on the job full time over the holiday to put a LARGE monkey
wrench in this porcess. Thus sleuthjean was unavailable to
participate in your Holiday Party. But cocktails will be served
after blocking this nasty $35 million Xmas bonus for the starving contractors.

Thank you Starbuck for the information about our water and to Bill for Matt Taibbi's articles.

These should be required reading for our political candidates and those holding office. Unfortunately, we have people in those positions now who seem off the chart, in another realm, so to speak, as if their focus is how to be elected, campaigning and basing critical decisions, on "their reality" of what position or vote to take based on their campaign to get into or staying in their political careers.

Enough already of decisions made on political reasons and/or purely economic reasons benefiting some at the expense of what is best for the community and the people.

Thank you to sleuthjean for being an excellent watchdog over the holidays!

This clearly illustrates that the PWB and our city council cannot be trusted period!

$35 million, more debt, do these people in council have no conscience?
(of course, we know by now that especially at Christmas, they don't, which is why the watchdogs were busy too!)

What gets me is that this was all done, while the public was thinking a variance to the treatment plant was coming, our PWB "was moving forward with plans anyway" ran over to Clackamas to get permits in order to build the plant, etc.
Why the hurry?
The State's comment period regarding a variance is still open until Jan. 3rd.

As I stated above, I don't think we can trust anything that comes out of PWB or Council after this episode!

There will most likely be a debt meltdown at some point in the next few years. Cities, counties and states have been loading up on debt for a long time and they don't seem to be able to stop.

People like Sam Adams are incapable of exercising any sort of spending restraint. I'm not sure why this is exactly, but I suppose it has to do with a deep seated desire to be liked. They figure that the best way to be liked is to give away taxpayer money. Nobody seems to complain very much so people like Sam just keep giving the money away.

Once the debt meltdown starts there will be tons of news articles where people say that they never saw this coming and that it is the "free markets" fault, and that rich people need to pay more taxes, etc. But really the solution is easier than that. Idoits like Sam Adams need to stop wasting money on stupid ideas and focus on the basic services. If elected officials can't figure it out then we need to replace them.

Andy, the meltdown may well be coming home to roost sooner. Just read where the state of Michigan is considering taking over the city of Detroit's finances - Detroit may be out of money by next April. Lots of issues there that likely don't just involve too much debt, but the lack of growth in a city to pay the future debt obligations will be a repetitive story over the next decade.

Meanwhile, a property owner I know, who wants to keep rents reasonable, went to the state for a permit to drill a well. He got the permit and drilled the well. The water came out clean, so he will disconnect. In other news, I am seeing serious water storage about my close-in neighborhood. Does anyone know if they are still seriously over-estimating usage?

"it doesn't have to make good on its general obligation bonds and similar "full faith and credit" paper any more, because it is in bankruptcy."

Pray tell - How do they expect anyone to wnat to buy their bonds in the future?

Orange County, California seems to be doing OK now.

Of course, they also killed off their light rail project.

If a city were to vote to dissolve then the county (or counties) would be left to try to pick up the pieces. But a county can not choose to dissolve.

We need a healthy look-back provision to go after spending (and promises made) going back 5 years or more, so as to save the captive real-property-owning taxpayers from having to cover for the corrupt (un-"sustainable") government actions.

If the City of Portland were to dissolve to whom would the PERB send the bill when they discover that the employees failed to pay enough from their paychecks to cover expected retirement obligations? The lenders who funded the City's side account in the PERF would surely lay claim to any remaining balance, as an attachable asset of the City.

===

The economy will not emerge from this mess, as I have said before, until after 10 year treasury notes offer 10 to 12 percent returns for a 3 to 5 year period. Just for kicks, calculate what portion of the federal budget would have to be dedicated to doing nothing more than servicing debt. (That, and calculate what this would do to home prices where "homeowners" are nothing more than glorified renters, and by extension what this would do to local government spending funded by property taxes. (I guess my broken record almost stopped working several years ago.)

Who needs a real economist when they are such downers.

Does anyone remember Erik Sten trying to capture all the increased "wealth" represented by the rising home prices, fueled by private debt. Now that was the real spirit of the OWS crowd, pledge it as collateral to go on a leveraged shopping spree. Can we declare Keynesianism to be as reviled as Communism or Nazism? The sooner the better.

According to NYT, Orange county in California paid back their bonds, with extra interest.

It seems that the situation in Jefferson county Alabama is complicated by there being several types of bonds, not all of which are "general obligation" bonds and also the role play by banks, etc. Bottom line is that these people got the benefit and privilege of using other peoples money to accomplish their goals, they should pay their debts. If the people of Jefferson county and the State of Alabama fail to pay their debts, then they should be banned from the bond market forever. Also, I think the debt holders should be allowed to seize any real property owned by the county.

Finally, the situation in the CoP is that the elected officials of the City were elected by the voters. Therefore, the responsibility falls to the voters, if you don't like what they do-- stop electing them!

So what do you do when after being elected, they change?
Or, they got in because the media and insiders helped put them in?
Bide time hoping that not too much damage will be done until the end of their term?
Some in office have strayed way off their oath of duty or responsibility they took.
We have a team of debt producers sitting in Portland City Council right now.
They won’t listen when council chambers are filled with businesses and citizens pleading with them to stop the spending.
They get by with much of this when the mainstream media covers for them and won't inform the citizenry of the seriousness of their actions.
Did the O write a story about the Clackamas episode sleuthjean wrote about?
Why do you think the water watchdogs are so active, they are concerned that our water asset could be taken by the folly of our council's action.
http://citizensforportlandswater.org/