With less than a year to go until America elects its next president, the country has been warned of a looming new economic crisis. Major cities across the United States are declaring themselves bankrupt in the face of huge debts and declining revenues.
Birmingham, in Alabama, and Harrisburg, the state capital of Pennsylvania, are the latest high-profile cities to file for bankruptcy. Analysts warn as many as 100 American cities are at risk.
They are taking their lead from a scenic Californian city which has become the poster child for the blight of municipal bankruptcy.
Vallejo, home to 115,000 thousand perched on wooded hills across the water from San Francisco, has just emerged from three years in bankruptcy but still bears the scars.
Public services were slashed. Half the fire department were laid off, the police force cut by a third and libraries, parks, senior citizens services all drastically reduced.
"We've created a situation where the city of Vallejo has become very attractive for criminals because it just doesn't have the police officers," restaurant owner Ken Ingersoll told Sky News.
"You can't market away someone's safety. I can't run an ad in the paper or a TV commercial saying come to Vallejo. Read More
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