Why U.S. Cities Are Going Broke

Spending cuts are abound in many U.S. cities as inflation lingers and pandemic-era stimulus dries up. At least 53 major cities have debt obligations that outstrip their assets, according to an estimate from Truth in Accounting. The group estimates higher debt burdens than many public officials report, due to allegedly underreported retiree benefits. The rising public debt may potentially leave future generations on the hook for financial decisions made by today's leaders.

Correction (4/25/24): At 7:45 a previous version of this video incorrectly named the Mayor of Chicago. His name is Brandon Johnson.

Chapters:
0:00-01:01 Cold Open
01:10-04:45 Chapter 1: Spending
04:45-06:53 Chapter 2: Management
06:53-08:39 Chapter 3: Credit ratings
08:39-10:46 Chapter 4: Federal help

Produced and Edited by: Carlos Waters
Animation: Christina Locopo, Jason Reginato
Supervising Producer: Lindsey Jacobson
Additional Footage: Getty Images

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Why U.S. Cities Are Going Broke

[mandyyonge]

Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid economy crisis, and even pull it off easily in favorable conditions. Unequivocally, the collapse is getting somebody somewhere rich

[kortyEdna]

More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[Angelavaldess]

A fellow retiree like myself was in a mortgage situation years back Thankfully after consulting with a financial planner he was able to sort it through income from a $25, 000 initial investments. Since then the importance of investing cannot be over emphasised.

[franknuzzo]

They don’t have a cash flow problem. They have a spending problem.

[WilliamsTyler]

Every week I buy more bitcoin because i believe it would surge after the halving, but could Gold be the safest buys other than BTC & APPL in terms of growth with $150, 000 to outperform the market this year?

[Hannahbenowitz]

The cheque i cut the government on my propertirs and kinvestments are seriously eating into my project bufgets. It would hurt less if I received value for my taxes but healthcare still isn't cheap, my children's college tuition costs a small fortune, and my husband and I still have retirement to plan for. Right now the only solutioniwe see is to scale up my profits and with our limited knowledge, we are at a loss on how to do that.

[tonysilke]

The only American who won't acknowledge this Administration's failed economic policies is Joe Biden. "Shrink-flation' is the least of our worries compared to rising rents and stagnant wages, but it is an undeniable indicator of how bad our inflation has gotten. I have $100k that i like to invest in a non-retirement account, any advice on that?

[mr_nn]

Most cities take on debt with the assumption that growth will continue as it did in previous years.
Boy were they wrong

[rannyorton]

The average person has never been so poor. Millions of families are struggling financially as living expenses hit the highest levels in more than four decades. Over 60% of our country lives paycheck to paycheck and about 40% earns poverty wages. Even after working all their lives, more than a quarter of older people have no savings and many believe they will never be able to retire in dignity, while around 55% of elderly people try to survive on an income of less than 25, 000 a year.

[ryv]

The city may be broke but the ones who are in charge of it sure aren’t. Wonder why that is? 🤔

[MiquelMorterero]

I have savings of $1, 000, 000 and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire comfortably, or do I need some sort of money management?

[sethalexander]

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” – Abraham Lincoln, First Republican President

[garrusch]

The suburb I live in demolished a 75 year old high school (nothing wrong with it) and wants to build a new one with higher taxes. They are also building a 12, 000 square foot golf course glub house at a cost of $12 million dollars (a cost that is 4X normal construction costs). I can't believe what's going on in my city. It's criminal.

[misterfunnybones]

It's all debt. Anyone saying taxes are too high doesn't realize debt is already supporting their lifestyle more than they can imagine. Roads, water, sewer, basic infrastructure, is built, then needs maintenance, then needs replacing. It's funded by debt.

[Suntz_u]

On a brighter note, every recession comes with an equal chance in the fin-mrkt if you're early informed and equipped, I've read folks amass up to 7 figures during these times, and even pull it off easily in a favorable economy. Truthfully, I’d need guide please for a boomer like me to attain such amount for retirement, we definitely need to benefit from this situation somehow.

[Sampson-jhyq]

My main worry, given the current rate of inflation, my focusis how to increase my $300k reserve, which has been sitting stagnant for a very long time with little to no gains. I understand the long-term strategy, but since my savings are being eaten up by inflation and my portfolio is losing value every day, I need to find a solution quickly.

[orlyt]

That's why taxes need to be spent more wisely. Unfortunately policy makers don't understand that.

[meowismeify]

Yet we had 95 billion to give Taiwan, Israel, and Ukraine...

[bruhzooka]

nobody can afford stuff anymore. Everything 30% more expensive, but nobody got a 30% raise.

[cool]

95 billion to another country vs being spent in America