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Originally Posted by retiredguy123
I thought that already happened in Detroit and Stockton. I just assumed that the Federal Government is bailing them out, but they don't want the public to know about it.
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Both went through bankruptcy, only place a bankruptcy can be done is federal court, employees took a hair cut, but did not do too badly, no federal money to bail them out. But the numbers were not that large. Other municipalities and states have much larger unfunded liabilities, my understanding is the real danger is that of a cascading effect, a large enough default could start a chain reaction that could take the whole economy down.