The week at a glance...United States

United States

Compton, Calif.

Bankruptcy looming: The list of California municipalities facing bankruptcy lengthened this week as officials in Compton, a city of 93,000 near Los Angeles, said it had accrued $43 million in debts and wouldn’t be able to meet payroll on Sept. 1. City treasurer Doug Sanders said the city would either have to default on outstanding bonds “or have a serious talk about bankruptcy.” Earlier this month, the city council of San Bernardino voted to seek bankruptcy protection, following formal filings in recent weeks by Stockton in the Central Valley and Mammoth Lakes in the Sierra Nevada. Investor Warren Buffett said the trend could take hold in other states. “Once people find that the city works the next day,” he said, “it makes it easier for the city council next time they have a problem with pensions—or whatever it is—just to say, ‘Well, we’ll declare bankruptcy.’”

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