It's not one that many people saw coming, but if you paid attention you knew it was there. Years of overspending and generous benefits to public employees is causing a coming wave of government bankruptcies. Detroit is close, but the first to actually go under is Stockton, CA.
The Chapter 9 bankruptcy case is being closely watched nationally for potential precedent-setting implications.
The $900 million that Stockton owes to the California Public Employees' Retirement System to cover pension promises is its biggest debt. So far Stockton has kept up with pension payments while it has reneged on other debts, maintaining that it needs a strong pension plan to retain its pared-down workforce.
With smaller municipal bond options and more debt being piled on top of municipalities, there just isn't much room to maneuver. More and more pension and insurance liability is piling up and ObamaCare will make things even more expensive within the next years.
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