Picking Over the Bankrupt Carcass

Published August 29, 2013 2:02pm ET



San Bernardino is a smallish city to the east of Los Angeles but a judge’s ruling yesterday that it is, indeed, insolvent will reverberate loudly across the country in all those jurisdictions where political power was bought by promises of future benefits that are now coming due and cannot be financed. The biggest marker took the form of pension and health care benefits for retiring municipal employees. The bankruptcy ruling makes it likely that they will get a haircut.

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