Bankruptcy Not Just a Personal Problem
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Bankruptcy Not Just a Personal Problem
J. A. Heard
COMM/215
11/23/09
D. Olson
Bankruptcy Not Just a Personal Problem
Bankruptcy is not just a problem for consumers but the concern of State and local Governments, business entities, and churches as well. In California alone there is a 12.3% jobless rate that accounts for nearly two million citizens applying for unemployment benefits. The increase in unemployment has not only caused an increase in foreclosures but also it has caused a decrease in property taxes and a decrease in sales placing a huge burden on State and Local Government. The churches are also suffering by realizing a lack of donations caused by a struggling economy.
With two million people out of work, mismanagement of finances is less significant than the loss of income. Without the ability to pay mortgages and bills, bankruptcy becomes the only option left for many consumers. This economic downturn is due to the recession the country is experiencing and is affecting cities across the nation from remaining solvent.
I was not aware that a city could file for bankruptcy until recently. The city of Vallejo filed for bankruptcy in May 2008, due to a $16 million deficit in its $78 million general fund budget. Slammed by the decline in property and sales taxes, Vallejo's general fund shrunk to $65 million for 2009-10.
Bankruptcy not only affects the creditability of the city, it drastically impedes its ability to providing services people depend on for survival. It directly impacts the city’s capacity to preserve public safety due to forced layoffs of civil servants. Police officers, paramedics and firefighters are just some of the service providers impacted by the recession. The city of
Vallejo cut its police force by 18% that immediately allowed a 25% increase in crime. The response time for the fire departments in Vallejo has gone from five minutes to 25 minutes, which means one and two alarm fires are at risk of developing...
J. A. Heard
COMM/215
11/23/09
D. Olson
Bankruptcy Not Just a Personal Problem
Bankruptcy is not just a problem for consumers but the concern of State and local Governments, business entities, and churches as well. In California alone there is a 12.3% jobless rate that accounts for nearly two million citizens applying for unemployment benefits. The increase in unemployment has not only caused an increase in foreclosures but also it has caused a decrease in property taxes and a decrease in sales placing a huge burden on State and Local Government. The churches are also suffering by realizing a lack of donations caused by a struggling economy.
With two million people out of work, mismanagement of finances is less significant than the loss of income. Without the ability to pay mortgages and bills, bankruptcy becomes the only option left for many consumers. This economic downturn is due to the recession the country is experiencing and is affecting cities across the nation from remaining solvent.
I was not aware that a city could file for bankruptcy until recently. The city of Vallejo filed for bankruptcy in May 2008, due to a $16 million deficit in its $78 million general fund budget. Slammed by the decline in property and sales taxes, Vallejo's general fund shrunk to $65 million for 2009-10.
Bankruptcy not only affects the creditability of the city, it drastically impedes its ability to providing services people depend on for survival. It directly impacts the city’s capacity to preserve public safety due to forced layoffs of civil servants. Police officers, paramedics and firefighters are just some of the service providers impacted by the recession. The city of
Vallejo cut its police force by 18% that immediately allowed a 25% increase in crime. The response time for the fire departments in Vallejo has gone from five minutes to 25 minutes, which means one and two alarm fires are at risk of developing...