Skip to content
Catholic Online Logo

By Catholic Online (NEWS CONSORTIUM)

4/3/2013 (2 years ago)

Catholic Online (www.catholic.org)

Is Kim Kardashian really more important than mass municipal bankruptcy?

As the nation fawns over Kim Kardashian's latest apparel and her baby, a judge has cleared the way for Stockton to proceed with Chapter 9 bankruptcy hearings. Stockton owes nearly $1 billion to the state retirement program. The outcome of the case could set a precedent that may reverberate nationwide. Sadly, Americans seem more interested in Kim Kardashian than the potential of mass, nationwide bankruptcy.

Kim Kardashian, acting worth more than your pension.

Kim Kardashian, acting worth more than your pension.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

4/3/2013 (2 years ago)

Published in Business & Economics

Keywords: Stockton, bankruptcy, pension, retirement, precedent, Kim Kardashian


STOCKTON, CA (Catholic Online) - The largest city in the nation to ever declare bankruptcy is moving forward with plans following Monday's ruling by a judge that said city can go ahead and declare Chapter 9. The case will resolve who gets paid first from limited city funds - retirees or creditors.

During heady and cash-rich days, Stockton, along with many other major cities across the nation, attracted a talented workforce with the promise of very generous retirement pensions. However, those pensions have become the city's single biggest liability. Stockton owes about $900 million to the California Public Employees Retirement System (CalPERS).

Payments to the system have continued, but the city owes more than it can pay. The nearly $1 billion in pension debt is the single largest liability the city owes and it has done much to bankrupt the coffers. 

The cash-strapped city has already cut public services including police forces as much as they can. Police, for example, now only respond to emergencies in progress. Crime has spiked.

The city's proposal now involves reducing some of the current pensions without touching those previously negotiated. However, attorneys for some creditors argue this is unfair and that all pension plans should be cut, not just new ones.

California law says Stockton must pay the pensions, however bankruptcy court could allow the city to restructure the debt, effectively getting out of having to pay some of the pensions. This may conflict with California's state rights as outlined under the 10th Amendment. So which is more powerful, the 10th Amendment or federal bankruptcy law?

That question remains to be answered.

Following Stockton, several cities have declared bankruptcy and if Stockton emerges victorious in court, it could inspire other cities to do the same, as a means of avoiding obligations that have become too burdensome to keep.

At the same time, if cities cans imply write off debt they accrued by making generous deals during good times, then there may be little to discourage them from making more promises to the next generation of workers -- promises they might not be able to keep.

For now, it is impossible to predict the outcome, but the entire nation is watching Stockton to see what will happen next. What happens to Stockton might just happen across the nation.

Meanwhile, the rest of the country appears more interested in the supermarket magazines with their glossy photos of Kim Kardashian and Justin Bieber.

---


Pope Francis: end world hunger through 'Prayer and Action'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for May 2015
Universal:
That, rejecting the culture of indifference, we may care for our neighbours who suffer, especially the sick and the poor.
Evangelization: That Mary's intercession may help Christians in secularized cultures be ready to proclaim Jesus.


Rosaries, Crosses, Prayer Cards and more... by Catholic Shopping .com


Comments


More Business & Economics

14 years after 9/11, One World Trade Center lacks the bustle of the old Twin Towers Watch

Image of The new One World Trade Center lacks the bustle of the old, with a third of its office space remaining empty.

By Matt Waterson (NEWS CONSORTIUM)

Following the aftermath of the September 2001 attacks in New York, Larry Silverstein, the property developer who had bought the lease to the World Trade Center for more than $3 billion, vowed he would rebuild. LOS ANGELES, CA (Catholic Online) - Almost a decade ... continue reading


Aging global population threatens to send world debt OUT OF CONTROL, Goldman Sachs warns Watch

Image of Part and parcel of Japan's economic crisis is the rise of male

By Catholic Online (NEWS CONSORTIUM)

The global economy is going to need a new business model - and fast. According to international financial adviser Goldman Sachs, the world's growing aging population - coupled with the reduction of young workers, the world is drowning in debt that it will be ... continue reading


Los Angeles boosts minimum wage to $15.34 an hour, largest U.S. city to do so Watch

Image of Significantly, the bill in its current form includes tipped workers. This means that tips would not count towards the proposed minimum-wage base pay of $15.

By Catholic Online (NEWS CONSORTIUM)

The minimum wage for the city of Los Angeles will be $15.34 by the year 2020 - until then, wages will increase incrementally each year. The vote is being hailed as "the most significant victory so far" in the push to increase the minimum wage nationally. LOS ... continue reading


Another attack on 'In God We Trust': Atheists take a stab at U.S. currency motto Watch

Image of The United States currency's motto is 'In God We Trust.'

By Atarah Haely (NEWS CONSORTIUM)

After a series of unsuccessful legal battles against the religious quote on U.S. currency, a popular atheist activist claims to have found a new and more effective way attack the country's beloved "In God We Trust." MUNTINLUPA, PHILIPPINES (Catholic Online) - Michael ... continue reading


Verizon to buy AOL in $4.4 billion deal Watch

Image of Verizon says the deal will shore up its wireless and over-the-top or OTT video strategies.

By Catholic Online (NEWS CONSORTIUM)

In a deal valued at approximately $4.4 billion, telecoms giant Verizon will acquire digital conglomerate American Online, or AOL. Verizon announced this week it would acquire digital conglomerate AOL, intended to bolster the telecommunications giant's efforts ... continue reading


Five American tech companies have $430 BILLION in which to play Watch

Image of While other companies cry

By Catholic Online (NEWS CONSORTIUM)

While other companies cry "poor mouth" or say they have little at their disposal, at least five American tech companies are sitting on an overwhelming $430 BILLION in cash. There should be no surprise that Apple leads the list by a wide margin. LOS ANGELES, CA ... continue reading


New York Times reports substantial loss in spite of digital growth Watch

Image of There has been a move to make the newspaper more attractive to readers. The newspaper's cooking product, a hub for recipes and food-related content, has been free since its introduction.

By Catholic Online (NEWS CONSORTIUM)

In just one of growing death knells of the daily print newspaper, the iconic New York Times reported a hefty $15 million loss for the first quarter of 2015. Digital subscriptions continue to show solid growth. Digital advertising grew at a double-digit pace. ... continue reading


Shakeup at Walt Disney Parks -- information technology employees replaced by non-immigrant workers Watch

Image of Both Disneyland and Walt Disney World certainly were not the happiest places on Earth for many employees at the beginning of this year.

By Catholic Online (NEWS CONSORTIUM)

Both Disneyland and Walt Disney World certainly were not the happiest places on Earth for many employees at the beginning of this year. Multiple layoffs went around to many several information technology employees and were told their final day would be January ... continue reading


Apple can't seem to spend money fast enough as profits soar and cash reaches a staggering $194 billion Watch

Image of At Apple - the company can't seem to spend money fast enough.

By Catholic Online (NEWS CONSORTIUM)

Digital gadget maker Apple has ended the first calendar quarter with $33 billion in cash and short-term investments and $160.4 billion in long-term investments. Apple currently has $194 billion in cash and investments, more than any other non-financial company ... continue reading


Meet the billionaires who pledged to give up their fortunes to change the world Watch

Image of

By Talia Ramos (NEWS CONSORTIUM)

Through the "Giving Pledge," men and women belonging to the upper crust of the society, with billions of dollars in their name, commit to donating a large chunk of their fortune, whether through their lifetime or through their will. Coming from the majority of their ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, Sirach 51:12-20
12 And therefore I shall thank you and praise you, ... Read More

Psalm, Psalms 19:8, 9, 10, 11
8 The precepts of Yahweh are honest, joy for the ... Read More

Gospel, Mark 11:27-33
27 They came to Jerusalem again, and as Jesus was ... Read More

Saint of the Day

Saint of the Day for May 30th, 2015 Image

St. Joan of Arc
May 30: St. Joan of Arc is the patroness of soldiers and of France. On ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter