City goes Chapter 8

In recent news, there are several cities in California that are bankrupt. I know what it means for a person to be bankrupt, but what happens to the city?

How is this for a scenario. A city of 300,000 people, debts totalling 500% of the amount the city has to offer its creditors. The city council has done everything it could to restructure the bills, increase revenues, sold of city assets and still it is not enough, the BANK wants its money, right now if you please. The BANK comes in and scoops out every last penny out of the city - leaving nothing. Maintenance of roads, public parks, water and sewage (at lease up here in Canada), police and fire protection, all gone. What now?
The BANK still wants its money, so now that it effectively owns everything that keeps the city operational the first thing that happens is taxes. Lots and lots of taxes.

Property tax is always the first to happen. Those who own homes pay through the nose to the city to keep the city running. Now the BANK wants its money so it raises property taxes. People try to sell their house and move away but who will buy it? If you don't pay your tax, your house gets seized, too bad, so sad, another house stolen by the BANK, another family on the street, another life ruined. More and more places get siezed, more and more people forced to move away. Now businesses start to suffer, no one to work and no one to buy the products. Businesses begin to shut down, more assets getting seized by the BANK. Pretty soon, no one has anything left to give because the BANK has everything.

The BANK has gotten its blood, but it is still not happy. It has all of these empty buildings that aren't making money for the BANK so the BANK does a turn around.
"I will let you live in these houses if you do exactly as I say" the BANK tells all of the people whose lives have been ruined.
The people look and see that winter is coming and realize the choice is do as they are told or freeze so they all say "yes BANK, we will do as we are told."
The BANK is happy. It has workers doing as they are told, sweating to produce things so the BANK will get bigger and stronger and the BANK gives back to the people only enough to survive - can't be giving away too much now, that would not be profitable.

A pretty far fetched scenario? Couldn't happen that way? Never ever seen such? Company towns look an awful lot like that. The Company owns everything, controls everything.
"Oh but" you say "Company towns are only a recent thing, they will never last".
Such things have existed for thousands of years.
Replace "the Company" with "the King" and replace "the people" with "the serfs".

Think about that next time you vote for something that needs to be paid for over the next 20 or 30 years.