BLUE MODEL CRISIS: Will Hartford Be the Next American City to Go Belly Up?

The last major American city to go bankrupt was Detroit, which was dealt a mortal blow by the financial crisis and officially filed for protection from its creditors in 2013. Last year, Puerto Rico became the next car on the bankruptcy train, and other U.S. territories may follow suit. But so far, large U.S. cities have remained solvent, even as the public pension crisis festers, and cities like Chicago look to be on the edge.

But it just became more likely that we will see another big city bankruptcy in the near future. . . .

As we noted before, it’s remarkable that this is taking place in one of the richest states in the union and in the midst of an historic bull market. The structural problems in state and local finance run deep, and they will not resolve themselves.We need to be prepared for the fiscal storm that will sweep the country the next time a recession hits.

Despite a superficial prosperity from the financial and construction sectors, New York City is in much worse shape than it appears.