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Bankruptcy of Pennsylvania capital points out nationwide debt problem

Oct 18, 2011 Mike Garretson

Bankruptcy of Pennsylvania capital points out nationwide debt problem
As a number of municipalities throughout the country struggle with mounting debt collection pressures, options for handling the dues are beginning to run thin. The city of Chicago has begun targeting public workers for outstanding debt in a collection process that has been spearheaded by Mayor Rahm Emanuel.
 On Wednesday, however, the capital of the state of Pennsylvania took a less creative approach and filed for bankruptcy. Supporters of the move argued it was the most sensible course of action, the only major alternative being a state takeover that would force the city to channel its most lucrative assets toward paying off Wall Street creditors, according to the Washington Post. "We would have to sell our revenue-generating assets - parking garages and meters - to pay off our creditors, who we believe have not made a significant contribution to a global solution," the Post quotes Brad Koplinski, the council member who introduced the bankruptcy measure, as saying. Last month, Alabama's Jefferson County barely averted bankruptcy from a failed sewer financing deal, the Post added, and the city of Central Falls, Rhode Island, went into bankruptcy earlier this year.