Please respond to the 2 people below in a proper manner. There should be one response per person so there should be a total of 2 responses.

Person 1 (Andrew):

The ramifications of entire municipalities going bankrupt are innumerable: in a case where revenues are disproportionately going to service entitlement obligations, as in the case of Chicago where 20% of the city budget is spent on pensions, comprising over 80% of its property tax revenues (https://www.governing.com/finance/chicago-confronts-35b-pension-crisis-among-nations-worst#:~:text=State%20law%20doesn%27t%20allow,for%20the%20city%20to%20junk.), these cities risk damaging their credit ratings and ability to provide basic services to their citizens.Without the ability to use credit or issue bonds for infrastructure projects, these areas further fall into decline.This leads to a death spiral, wherein property values deteriorate, decreasing the property tax revenues the city depends on to fund these ever-growing obligations.This "upside-down pyramid" becomes more and more top-heavy, portending its eventual collapse.

In the case of those who do not adhere to mandatory evacuations in natural disasters (excluding those who are for some reason physically unable to do so), such behavior verges on the reckless.As outlined in the "Too Big to Fail" module, moral hazard drives such behaviors, and the wider population frequently bears the costs.Those who remain behind frequently cite concerns about looting for not evacuating (https://www.abcactionnews.com/news/local-news/i-team-investigates/psychological-factors-affect-choice-to-evacuate-or-not-during-hurricanes#:~:text=Multiple%20factors%20influence%20the%20decision%20not%20to%20evacuate&text=Cuite%20said%20some%20who%20choose,track%20and%20severity%20of%20storms.).Putting aside the self-evident argument that life is more precious than property, staying behind to "defend" your home in a natural disaster comes at a tremendous cost to all, where clean-up and rebuilding efforts are pre-empted by rescue missions to account for and treat injuries of those who elected to ride out the (storm, wildfire, flood, etc.) in the name of "protecting" their now-ruined-anyway personal property.By adding to the search, rescue, and cleanup workloads, the few drive up the recovery time and costs for all (directly and through increased insurance premiums which must account for the additional attendant expense of the more-protracted recovery).

While planning for our future retirement needs requires facing our most brutal reality, our eventual death, it is an imperative and prudent to do so; thankfully there are any number of ways to do this that take (most of) the morbidity out of the processes.Actuaries, of course, use a combination of factors to determine our anticipated lifespans, and we can use this information to dispassionately determine investment horizons, risk tolerance (i.e. will we have enough time to recover if there is a major negative market adjustment), and insurance needs.While there is a question of whether entitlements will exist in the future, I remain hopeful that this generation will solve this longstanding issue and ensure their solvency.However, it would be misguided to rely strictly on the government to fix this these programs for retirement planning purposes, as the expression is true: the only certainties in life are death and taxes.

Families migrating to other areas of the country during COVID drove both positives and negatives for the local economies and of those they fled.Many communities that had seen their populations dwindle over the last several decades suddenly saw a reversal of this trend.This is, of course, good for their tax base, local businesses, and local real estate markets.However, it also strains local resources that did not contemplate such a rapid increase in the population.Additionally, this migration gutted commercial real estate markets in the cites from which these families moved.

In the cases of Chicago and Detroit specifically, these cities have seen a shift in their economies and an explosion of their obligations that have triggered deteriorating financial conditions where their obligations outpace revenue growth.The top four employers in Chicago are the federal and local government, and its population, personal disposable income, average wage, and consumer spending are all predicted to decline over the next 5 years (https://www.chicago.gov/content/dam/city/depts/COFA/OtherReports/State-of-the-Economy-Chicago-2023.pdf).In Detroit, the shift of manufacturing jobs (specifically in the auto industry), and the money these jobs pump into the local economy, moved to other states and countries, decimating the local labor and real estate markets.While labor shifts cannot be entirely prevented, many jobs are now in the service industry and are less dependent on physical location.Investing in job training and education for displaced workers is one of the most effective approaches to re-deploying these laborers.However, AI will affect nearly every occupation, everywhere, in the future, so this will be something that has the potential to impact, if not displace, a great many of us.

Because the conditions that lead to such massive failures within municipalities typically develop over decades, it is difficult to pull a single lever to correct them, or to identify a single culprit.I do not believe that it is immoral to use federal resources to stabilize such situations and ensure those facing loss of homes or basic services are protected from the worst elements of such devastation.It is frequently not these people who created such issues, and I do feel we have a certain obligation to one another to ensure we all have access to a minimum level of basic services (water and sewer among them).This is not to say our obligation extends indefinitely or that we have to make everyone affected by such situations permanent wards of the state: only that we have an obligation, I believe, to lift one another up when we fall down.

Unintended consequences of the programs and shocks to the economies that have led to the bankruptcy of large municipalities, for our generation, include the advent of the "gig economy" and younger employees feeling less beholden to their employers.Where other generations might work for a single employer for decades and retire with a pension, younger employees change employers, and careers, more frequently.There is little expectation from younger employees that they will receive a company pension in their retirement, and little expectation on the part of employers that employees would stick around long enough to be eligible for such benefits.This is born from the competing value of doing what is best for the employee versus what is in the company's best interest.Younge employees have reasoned that chasing ever-higher salaries and being willing to "switch teams" and work for a competitor will benefit them more in the long run, making their futures more secure, even if that means they have to fund their own retirements and forgo the benefits that go with working decades for a single employer.

Person 2(Beth):

People hear about individuals or companies filing for bankruptcy all the time, but have you ever thought that an entire city could also file for bankruptcy? Well it turns out that they can. One example of this is the city of Detroit. They filed for bankruptcy back in 2013, and while they have since exited the state of being bankrupt, they still have a lot of catching up to do economically and had to take some unfortunate and drastic measures to get to where they are today. In order to try and rebuild their economy, things such as pension plans as well as city-funded health care were greatly affected. This is devastating for the people who were receiving these benefits, however it was something that was necessary in order for Detroit to start their road to recovery. Now, the city's pension plan funding is almost back to where it was before they filed for bankruptcy. Natural disasters such as hurricanes also have a brutal effect on a city or state's economy. These events are unpredictable and the severity of them is different every time. There is no telling what the impact of a natural disaster will be. While we take measures to protect ourselves against the damage, it is hard to estimate the effect it will have financially on the community. It affects everything in the community when disaster strikes; housing markets, insurance rates, pension plans, disaster relief funds. Some people even stay when advised to evacuate because they want to try and protect their assets rather than their lives, which could lead to injury or situations that could have otherwise been avoided. With places that are frequently impacted by natural disasters, this could have a continuous negative effect on their economy. If a city is constantly having to rebuild and provide disaster relief aid to the members of its community, then they may have to look at the government for financial help.

Planning for your future is something that everyone should do, but not everyone does. It is important to understand that whatever your situation is now, may not be how it is in the future and you should take the necessary precautions in order to try to best prepare yourself for anything that could happen. Planning for your future could be things such as setting up a retirement fund, investments, the type of insurance you get, funeral arrangements, a will, even plans for events like natural disasters. Some people do not like to think about their future and things that could potentially happen to them, they do not want to face the reality of life. Things can happen and you may not be prepared for them, which could end up leaving you struggling and in a tough situation. While relying on the government for financial help or in the future sounds like a nice plan to have. It is not always the most reliable option. Things such as health care and social security are two big things that people rely on from the government, but some people may not qualify for certain healthcare benefits and we have heard time and time again how social security benefits are most likely going to run out based on the current state of our economy. I do not believe a stable future is ever guaranteed even if you do plan ahead for your future. When it comes to remote working and families moving to different cities because now they can work anywhere, it can have both good and bad effects on different municipalities. It stimulates the economies of the areas that people are moving too, boosting multiple markets in the area. Boosting the markets also allows for cities to develop more and earn more funds. However, when companies allow their workers to work from home, it negates the need for physical office space, which in turn causes the business district to take a hit. Office spaces no longer need to be rented out and the population will start to decrease with workers moving to more desirable locations.

A city filing for bankruptcy does not come out of nowhere. There are many factors that can contribute to why a city would file for bankruptcy. In cases like Detroit, some of those factors included a declining population, mismanagement of their money by the government, and furthering certain political agendas.They had a substantial amount of debt, and even though they were able to come back from bankruptcy, their economy is still a work in progress. As for Chicago, it shares a similarity to Detroit's filing in which the city was trying to further their political agenda of trying to cut people's pensions. Chicago is a thriving city and was not on the brink of being bankrupt, but politicians used this reasoning to file in order to try and further their own political agendas. Many Americans work hard to earn their money in order to survive, but with that hard earned money comes a price. Americans are required to pay a certain percentage of their income to the government for things like income taxes and payroll taxes. We are supposed to pay these taxes in order for them to be used for things such as infrastructure developments, educational purposes, social security, healthcare, etc. Taxes are where most of our money goes and will continue to go. Some people will see the benefits of paying taxes over the years, some may not.

It can be seen as a big challenge to try and fix a city that has filed for bankruptcy. And trying to fix it can lead to some unhappy citizens. One of the most important things to start with is restructuring the city's monetary policy. Other "fixes" that will most likely not be very popular decisions, but necessary for a financial revival would be raising income taxes, reduced worker's benefits, and increasing service fees.

The most important way to avoid cities filing for bankruptcy in the future is by consistently monitoring their financial conditions. By constantly monitoring them, cities can have a better chance at getting ahead of financial situations and asking for help rather than waiting for them to happen. Citizens can also help with this by voting for politicians with the best suited fiscal policies.

It is legal to bail them out, but bailouts can lead to immoral behavior. Cities need to continue to spend money to grow and make improvements, but they cannot do this if there is no money. The government will bail them out by encouraging them to continue to borrow money from them. The more money they borrow, the bigger the amount of debt the cities are creating. While the federal government is benefiting from this, the city's government is not. The government wants the cities to be reliant on them, but in reality, the government will not always be there to catch them when they fall. The city's government has a responsibility to its citizens to provide for them in the best way possible, but that is not always the case. People will lose their homes and basic necessities, but they cannot be helped because the city itself is struggling.

I think that the biggest unintended consequence for my generation is the issue of social security. Many of us are employed, even if it's just a part time job, and have been employed and will continue to be employed. So, we have been paying into the social security fund like everyone else. This fund is supposed to help provide at least some sort of financial relief for us in the future for when we retire. However, that is looking less and less like the case. At the rate we're going, we will be lucky if we see a penny of that money.

I think a big competing value, especially for me, is when it comes time to elect who is going to decide these policies and run the country that will impact my future. On one hand I'm thinking about financially who is the better candidate, the one who will best run this country so that I am financially well off in the future. On the other hand I have to think about if, socially, that this person is the best choice for the world I want to live in. What am I willing to sacrifice to ensure a good future for myself? What does a good future for myself even look like?