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 What in the world is going on in Europe? Each day things just seem to get stranger and stranger. We are being told that a "deal" for a second Greek bailout has been reached and that Greece will not default in March. But behind the scenes it seems clear that many politicians in Germany (and in the other northern European countries as well) would like to kick Greece out of the euro. So what exactly is happening here? Well, it is complicated. The United States, along with other members of the international community, put a tremendous amount of pressure on Germany to bail out Greece one more time. Germany does not want to look like the bad guy, so they are going along with this bailout but they are also imposing conditions on Greece this time that will be almost impossible to meet. And when Greece fails to meet its "obligations", that will give the northern Europeans the excuse that they need to kick Greece out of the euro. At this point, many politicians in northern Europe are convinced that Greece is a "lost cause" and that it is not fair to ask northern European nations to pay the price for the financial mistakes of Greece. Greece is basically completely and totally bankrupt, and the nations of northern Europe don't want to have a "financial dependent" on their books forever. They are looking for a "way out", and this new agreement lays the foundation for that. (Read More.....)
 Is the state of Illinois bankrupt? Well, if Illinois is not totally broke already it is certainly well on its way. The state government has now quit paying even the most essential bills. It spends three dollars for every two dollars that it takes in. The state of Illinois now ranks eighth in the world in possible bond-holder default. That is actually one spot ahead of the state of California. As much of a mess as California is (as we have previously detailed at length), Illinois is in even worse shape. Every major rating agency has downgraded Illinois debt, and Illinois now pays millions of dollars more to insure its debt than any other state in the nation. So yes, the state of Illinois is a complete and total basket case. For a long time, many analysts had expected California to be the first state to go "belly up" financially, but now Illinois seems to be the favorite. Not that Illinois is alone. Thousands of state, city and local governments across the United States are facing massive debt problems. All of the borrowing that was done to push communities towards achieving the American Dream is now coming back to haunt localities with a vengeance. Debt is a very seductive and yet very cruel master, and the government of Illinois is rapidly finding out just how painful it can be to drown in a sea of debt. (Read More.....)
 Is the state of California bankrupt? Well, an increasing number of politicians and economic analysts are answering that question in the affirmative. The truth is that California is a complete and total economic disaster area. The state government of California is projected to have a budget deficit of at least 19 billion dollars this year, and next year the budget gap is projected to grow to 37 billion dollars. To put that in perspective, the entire budget for the government of California is only about $125 billion per year. Already, California's credit rating is the lowest of all 50 states, and there are persistent rumors that it is about to go lower. If California's credit rating is slashed, it will be very expensive for them to borrow the money that they desperately need. Once upon a time, the state of California was the poster child for the American Dream, but now it is on the leading edge of America's rapidly unfolding economic nightmare. (Read More.....)
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