Jefferson County, Alabama, with a population of 662,047, according to the 2000 U.S. Census, is preparing for a possible bankruptcy filing, according to The New York Times.

The culprit? $3 billion in bonds with rapidly escalating interest rates resulting from the exact same short-sighted financial planning that got so many home owners into trouble: adjustable rate loans (In this case, auction rate securities) that require higher interest payments as interest rates move up. The current turmoil in the credit market has sent the county's rates as high as 10%.
Town officials told the Times that a bankruptcy filing is not a sure thing and that efforts to negotiate with the creditors, Citigroup (NYSE: C) and JPMorgan (NYSE: JPM) have "some likelihood to work." If it doesn't, this will be the largest municipal bond default in U.S. history, and will etch Jefferson County's name in the annals of infamy alongside Orange County and the Washington Public Power Supply System.










Reader Comments (Page 1 of 8)
8-27-2008 @ 2:40PM
LibertyisFreedom said...
THE GOVERNMENT BETTER NOT ALLOW A CHAPTER 7 !
They "City Government" should be required to pay back all funds. Same as any citizen... "No exception"
No exception for "CORPORACRACY"...
8-27-2008 @ 2:44PM
Robert Stedman said...
Maybe instead of trying to be so G.D. politically correct these municipalities should concentrate on running their governments. Stop giving the liberals and the POS ACLU so much leaway, stop giving into the minorities and whining politicians and actually produce more than they consume. The whole country is not far behind.
8-27-2008 @ 2:45PM
UrDyingNUrSleep said...
Ask not for whom the bell tolls.
8-27-2008 @ 2:48PM
bmftioga said...
I live in Jefferson County and am blown away by the past and current members of the Jefferson County Commission that has put this county into this situation. This problem is not a new development, but rather an extension of a former commision and its main member, the current mayor of Birmingham, Larry Langford, and his reckless, consistent, use of the public's monies to fund his far- out dream projects. The current problem is due to the ridiculous sewer system that was built, incorrectly, by a joke of a contractor, and had to be rebuilt. Now, the current head of the commision has lived with Alice in Wonderland, and to this day has not accepted the reality of the situation. The majority of these commisioners have been derelict in their duties and, prayfully, will be voted out when its their time. Two very outspoken commisioners have tried to stop the bleeding, but were attacked for their views from the begginning. Thank God for my septic tank, but I will still be part of the eventual bailout, HIGHER COUNTY TAXES.
8-27-2008 @ 2:57PM
Jim said...
How funny is it that one of the advertising on this article is a Pay-Day loan offer. The quickest way to being bankrupt.
8-27-2008 @ 2:58PM
Ernie Gonzalez said...
The Church; the right people who hold the large amount of income should gather in unity and bail out each county, and clean up those sits that aren't doing their jobs. We the people need to stand in unity, Joseph was called for a time like this, where are the Joseph's....
http://www.twofoldgiftshop.com
8-27-2008 @ 3:01PM
DELICIOUS said...
THIS IS WHAT HAPPENS WHEN CORPORATE AMERICA OWNS THE GOP LOCK STOCK AND BARREL. PEOPLE SEEM TO NOT BE AWARE THAT 66% OF COMPANIES WHO SUPPORT THE GOP DON'T PAY TAXES....! CORPORATE WELFARE IS EATING UP MIDDLE AND LOW INCOME FAMILIES MONEY.
8-27-2008 @ 3:15PM
mike said...
Well The politician should have never gotten rid of Mare Island in Vallejo.
8-27-2008 @ 3:16PM
rick taylor said...
If McCain(Bush lite) gets in the white house America will have to do the same thing
8-27-2008 @ 3:18PM
Zhenya said...
The city of Vallejo is NOT a suburb of San Francisco like the story under the photos state. There is a huge bay of water between SF and Vallejo. It appears that many media writers erroneously likes to consider any area of the bay area as a suburb of San Francisco which is far from the truth. Each area has different lifestyles and opportunities.
8-27-2008 @ 3:24PM
bernie said...
Get rid of all the deadbeats in city government,end welfare handout, end 20 years and a soft fat pension, run lawyers out of the county, hang trouble makers that won't work in town square. Shut down the Universities thats turning out dummies that don't know how to work. You just can't feed AH's that produces nothing but an appetite.
8-27-2008 @ 3:26PM
Dan said...
DELICIOUS said...
THIS IS WHAT HAPPENS WHEN CORPORATE AMERICA OWNS THE GOP LOCK STOCK AND BARREL. PEOPLE SEEM TO NOT BE AWARE THAT 66% OF COMPANIES WHO SUPPORT THE GOP DON'T PAY TAXES....! CORPORATE WELFARE IS EATING UP MIDDLE AND LOW INCOME FAMILIES MONEY.
Name on corperation that does not pay taxes??? Dunbass. These same corperation supply JOBS....... Oh wait libral this work is a four letter word!!!
8-27-2008 @ 3:27PM
Dan said...
rick taylor said...
If McCain(Bush lite) gets in the white house America will have to do the same thing
Do you like OBAMA will spend less? His platform is to raise taxes and spend more....
8-27-2008 @ 3:34PM
bluqe said...
Counties and cities going belly up ? Really not much of a surprise there. I would hope though that they are given the same treatment in their filing as our beloved congress has seen fit to put on the little individual filer. Seems like our congress has found a way to make the little man pay through the nose while the banks and special interest groups get themselves a much freeer ride.
Me thinks there is something really foul here, and I believe it is again those in congress who seem to have forgotten just who it is they work for.
Time to send many of them home, and a good start would be old Nancy Pelosi and that fish face Harry Ried.
8-27-2008 @ 3:38PM
Noel Freedman said...
We should base the credit rating score on anyone who aspires to a governmental office; because what is born in the credit history genes will out in the flesh.
8-27-2008 @ 3:39PM
Karen said...
I am from Jefferson County and I find it sad and disturbing that Jefferson county
cannot pay their bills. I pay higher taxes and yet they have no money. Where has the money all gone? Too many higher ups and not enough real workers, They need to clean house in the Mayor's office and teh City Council needs restructuring.
8-27-2008 @ 3:47PM
bob said...
I'm surprised that the whole state of Michigan is not filing for bankruptcy. michigan is the only state with unemployment going up and wages going down; thanks to the most liberal government ever that does not know how to lead.
8-27-2008 @ 4:02PM
JOEL said...
"ZAC BISSONNETTE"
while you are in school do study geography,economic and politic,by doing so you will learn that Vllejo problems started when the US Navy skipped town,the only employer is the local bar,then a bunch of overpaid public Employee,finally by studying geography you will learn that Vallejo has as much relation with San Francisco as New York has with New Jersey,it also will help you not make as ASS of yourself , joel
8-27-2008 @ 4:04PM
eagle said...
Hmm... Who runs this county? I suspect those similar to those that ran the failed school system in that county. Politics is not for everyone.
8-27-2008 @ 4:07PM
FRED said...
8-27-2008 @ 3:01PM
DELICIOUS said...
THIS IS WHAT HAPPENS WHEN CORPORATE AMERICA OWNS THE GOP LOCK STOCK AND BARREL. PEOPLE SEEM TO NOT BE AWARE THAT 66% OF COMPANIES WHO SUPPORT THE GOP DON'T PAY TAXES....! CORPORATE WELFARE IS EATING UP MIDDLE AND LOW INCOME FAMILIES MONEY.
AND YOU REALLY BELIEVE THAT THE DEMOS. OWE NOTHING NOR ADD TO THE PROBLEM. YOU ARE THE PROBLEM OR AT LEAST A BIG PART.