[Iran Press TV] American states have taken drastic measures, bracing for more cuts, layoffs, and tax increases as they collectively owe trillions of dollars in debt.Some have. Caliphornia, on the other hand, has reelected the same old crooks. So did Maryland and Noo Yawk.
Some of the measures include releasing the prisoners early or laying off coppers. Some analysts, though, believe the root of the problem is that government employees have traditionally been overpaid.
Not "traditionally." In the heady daze of my youth we had underpaid civil servants, which was how they came to get tidy pay raises that have grown continuously due to cost of living raises.
States now do not have enough money to pay for pensions and will be forced to renegotiate retirement benefits of government workers.
"Unless they can renegotiate these liabilities, because they can't pay them, they're far too big, you have to look at bankruptcy by state governments as an alternative," economist Rollin Amore told Press TV.
The problem has been kept mostly hidden from the public eye. The finances of some states and local governments are comparable to the run-up to the subprime mortgage meltdown or that of the debt crisis hitting nations in Europe, analysts say.
Although the federal government is battling to reduce its deficit of nearly USD 1.5 trillion, President Barack
B.O.Obama has stressed that he is hopeful about a recovery.
"We've seen some encouraging signs that a recovery is beginning to take hold. An economy that had been shrinking for nearly a year is now growing. The challenge now is to do whatever it takes to accelerate job creation," Obama said.
No state has gone bankrupt since the Great Depression but currently a handful of cities have declared or are considering bankruptcy. At least 15 million Americans are currently jobless.