Which American Cities Will File Bankruptcy Next?

Tyler Durden's picture

We harp on the massive, unsustainable, yet largely unnoticed, debt burdens of American cities, counties and states fairly regularly because, well, it's a frightening issue if you spend just a little time to understand the math and ultimate consequences.  Here is some of our recent posts on the topic:

Luckily, for those looking to escape the trauma of being taxed into oblivion by their failing cities/counties/states, JP Morgan has provided a comprehensive guide on which municipalities haven't the slightest hope of surviving their multi-decade debt binge and lavish public pension awards

If you live in any of the 'red' cities below, it just might be time to start looking for another home...

To add a little context to the map above, JP Morgan ranked every major city in the United States based on what percentage of their annual budgets are required just to fund interest payments on debt, pension contributions and other post retirement benefits.

The results are staggering.  To our great 'shock', Chicago residents win the award of "most screwed" with over 60% of their tax dollars going to fund debt and pension payments.  Meanwhile, there are a dozen municipalities where over 50% of their annual budgets are used just to fund the maintenance cost of past expenditures.

As managers of $70 billion in US municipal bonds across our asset management business (Q2 2017), we’re very focused on credit risk of US municipalities.


The chart below shows our “IPOD” ratio for US states, cities and counties.  This measure represents the percentage of a municipality’s revenues that would be needed to pay interest on direct debt, and fully amortize unfunded pension and retiree healthcare obligations over 30 years, assuming a conservative return of 6% on plan assets.  While there’s no hard and fast rule, municipalities with IPOD ratios over 30% may eventually face very difficult choices regarding taxation, non-pension spending, infrastructure investment, contributions to unfunded plans and bond repayment.

So, what will it take to fix the mess in these various municipal budgets?  How about massive tax hikes of ~30% or a slight 76,121% increase in worker pension contributions in Honolulu...

Anyone else feel like the winters in South Dakota are suddenly looking much more manageable...

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Raffie's picture

All of them?

Seattle deserves to pop next. F U LIBERALS!

Muddy1's picture

Overlay this map with states that voted for Democrats in the national, state, and local elections, and where union embership is big and see the parallel.

Raffie's picture

I don't consider them Democrats any more, they are Socialist, short and simple.

Manthong's picture


Yeah, if any of those jurisdictions were run by Democrats for the last 20 or 30 years, then they would be in …

oh,  the shape that they’re in. ………

ergatz's picture

City by city bankruptcy is just a taste.

The whole country will soon feel the full force of the CURSE. http://wp.me/p4OZ4v-3z

John Kerry-Heinz's picture

I just wanted to say "I like South Dakota".  Phenomenal prarie dog shootin, great pheasant hunting, and fantastic people.  Gals from south dakota will make your head spin with the insane amount of work they can do. Put that in your iphone and smoke it!

Escrava Isaura's picture

Which American Cities Will File Bankruptcy Next?

All, because the entire capitalist system will fail next dacade.

These cities should file for bankruptcy now and reorganize it social contract, if they want to have any chance of survival.

Not going to happen.


Boris Alatovkrap's picture

Oakland, LA, Phoenix, Chicago… what is possible to go wrong?!

Time it is for Federal Reserve to print MOAR!

new game's picture

until faith is gone. fiat(h), just fiath spelled fuked up...

oh yeah, backed by extreme violence(death).

just sayin.

mankinds curse.

real labor payment is backed by guns, gold or pussy. old west worked, sure it was brutal, but it worked.

people knew who had a real amout of money.

then came the bankers and pens with laws to extract labor ahead of actual payment and the sheeple took the bait.

now it is the state, up to its eyeballs, done by entrusted reps; fiat for vote scheme.

thanks lbj, nixon. fuk heads...

hey, we get what we deserve.

oh, but not me though, cause how the fuk do i opt out?

iphone app to opt out? football, the view, facefuk, 

try a manifesto soon to be released. opt out of tech/ minimize, minimal stuff, get rid of it. the baggage that doen't allow mental and physical freedom. needless possesions, the achiles heal of mankind.

shinny beads, lol-the american indian fell for euro crap a long tyme ago. it has graduated to 800 phone to do it all. and be tracked. GGGGGGGRRRRRreat, as tony the tiger would roar

simple shit maynard...

technology is the trap. cars, phones, computers, next is digital fiat to close the loop phys cash leaves open.

and your guns, the last line of defense against the state. yup they are comin to get um. soooooon.

tyme has come to take a stand or forget freedom as we knew it...

random thoughts...

Refuse-Resist's picture

The Semitic con game must end if we are to survive.

They have to go back.

Snarkie's picture

Shiny beads might become currancy again. Stock up.

A Sentinel's picture

It's simple. Just tax the people who didn't do stupid things with borrowed money.

BarkingCat's picture

It is not capitalism that is failing.

Are you seriously going to tell us that governments, be it cities or county or states run based on capitalism? 

You either are very very stupid or you think that we are.

Blue Dog's picture

It has nothing to do with capitalism. Private ownership of businesses has nothing to do with cities and states overspending.

Pickleton's picture

"the entire capitalist system will fail "


Once an imbecile, ALWAYS an imbecile.  Yeah no, sorry shithead, this is progressivism failing.  The imbecile would do well to not the plethora of libtard cities here and then researc how them thar blue states have an unfunded liability problem on the order of 100x larger than the red ones. 


Just because you imeciles wont look at your ideology, doesn't mean that it's not the reason everything is collapsing around us.  And oh look, it is.

Froman's picture

Was wondering the same thing.  Also where are cities like Philadelphia, Baltimore, Gary, Indiana, etc.  Would love to see the methodology used for developing this analysis. 

Freddie's picture

Yeah the Chicago union President, aka a puppet for the dual shitizens really running the union, Bertha Lewis was this fat disgusting blob just like Michael Moore.

I think that fat pig retired.  Probably with a huge pension.

Phoenix is also almost broke?  Wow.  A insanely hot shithole. McCain-land.

Arnold's picture

Whoah, a rare double.

Maff Is Hard.
I endorse the double.

Arnold's picture

You are too kind , in your biased , correct label.

Antifaschistische's picture

in Houston....honestly, they aren't really socialist.

#1 They are politicians representing Parasite Nation and redistributionism....based on envy and a perpetual ignorance of the lack of willingness of those they represent to do anything to improve their own condition other that figuring out how to take what others have worked for

#2  In Houston...the City, the County Flood Control District...are all owned by the Developers.  The developers get permission for their  multi-hundred-million(even billions on occasion) dollar projects....then the taxpayers have to cover all the downstream traffic/road expansion/flood control issues.


marathonman's picture

Houston elected a Republican mayor last in the 1980's. Been run by Democrats ever since. The suburbs around the city have been growing like weeds ever since. People already voted with their feet.

pynky01's picture


Pickleton's picture

No idiot, the marxist democrat is the enemy.

JRobby's picture

Everything is great in this incredible recovery.

I don't understand what this article is saying?

ThisIsMadness's picture

They were not socialsts to start with. Just greedy bastards with other people's money.

itstippy's picture

"Overlay this map with states that voted for Democrats in the national, state, and local elections, and where union embership is big and see the parallel."

Did you even look at the data?  Or perhaps Texas is heavily Democrat and Union?

Worst Cities:

1) Chicago (IL)

2) Houston (TX) 

3) Austin (TX) 

4) Dallas (TX)  

5) Batton Rouge (LA)

6) Fort Worth (TX)



ArgusPanoptes's picture

Fort Worth is the only city on that list with a Republican mayor.  Are you being intentionally stupid, or do you really think Austin is full of Republicans?

itstippy's picture

Fair enough.  But the guy did say "States".

I'm just really, really tired of the endless comments denegrating Democrats and acting like Republicans are much more honest, upright, thoughtful, and fiscally responsible.  The Republican party is just as corrupt and vile as the Democrat party.  Republican politicians are every bit as bought and paid for.  Any politician who climbs the seniority ranks of their respective party has a 98% probability of being a lying crook with endless hidden agendas.

In my area there's a great rivalry between the Green Bay Packers and the Chicago Bears.  I live in Packer Country, so they are the good guys with white hats who can do no wrong, and the Bears are the dirty, cheating, unsportsmanlike evil bastards.  Drive 200 miles south across the Illinois border and the rolls are reversed.  The fans are idiotic.  They don't seem to realize that both teams play for the same league.

Scuba Steve's picture

Quite possibly the dumbest analogy ever written.

Yeah, the killing stats in Green Bay and Shitcago are the same ... dont be a fukkin liberal FIB from Illinois or Milwaukee or Madison for that matter and act like you are comparing Apples to Apples.

The Illinois fukked up situation isnt even in the same stratosphere as anything 200 miles north.

You're 1 of those fukkin queer libs smack-talkin on JSOnline about Walker just becasue he bitch-slapped the teachers and public unions back into line. Koch Bros backed or not its some semblance of common sense unlike the socialists that have been putting the state down the shitter for years.

Scuba Steve's picture

BTW, its obvious you are a FIB because EVERYONE knows the Packers are the real Americas Team and Bears have always been the black knight in the area.

Raymond K Hessel's picture

Scuba Steve went Paddocktardo!

pods's picture

And your comment is why the owners laugh to the bank. 

My side is right and honest, it's the other guys who are bad. (as long as we stay within our narrow field of argument) 

Never see the big picture of both sides screwing you. 


Scuba Steve's picture

I absolutely see that both sides are the problem and I definitely am libertarian bent.

I just hate fukking retarded analogies that make no sense, especially when the analogy references my neck of the woods.

And if you do not understand the analogy he was putting forth then I'd have to go ahead and say FU and STFU.

just sayin.

yogibear's picture

Plus Chicago and cook county keep giving their fat pensioneers ever-more yearly cost of living increases.

Many of them moved out of Illinois.

BarkingCat's picture

I thought it was called Crook County

Freddie's picture

Texans are college fan boy retards who love their Trayvon NFL, NBA, College and high school Trayvons like dumb retards.

They took a knee with their shit beloved Cowboys.  They too a knee for that BLM Trayvon who murdered 5 Dallas cops in cold blood.

Well Dallas killed JFK and the Dallas PD was in on it with the FBI, CIA, PentaGram, Secret Service and the rest.  JFK wante dto kill teh Fed, CIA and stay out of Viietnam.   The Dallas PD's pensions have also blown up.,  they just have bad karma.  

shovelhead's picture

What's wrong with Trayvon?

You don't like the daisies he's pushing up?

pods's picture

Jfk might not have been a fan of the deep state, but you know he did nothing about the FED. You've seen the links I post ad nauseum about it. Read one.


Antifaschistische's picture

Texas has a HUGE refugee problem.  It is VERY expensive to cover the costs for millions of illegals.  Education, Health Care, etc...

....but we really appreciate all the liberals in Vermont who've never seen a person with brown skin voting on immigration policy.   Pick your own potatos.