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The crisis which precipitated the unrest of 2027 began with an innocuous federal budgetary crisis in late September 2026, a crisis unseen in the entire history of the United States. The U.S. Congress announced that the Federal government was bankrupt. Its cumulative deficit spending from the previous decade had so far outpaced incoming tax revenues for the forseeable future that it was forced to default on all oustanding financial obligations. Tax revenues had been grossly underestimated since the end of the war in Guatemala. Foreign governments that had for decades propped up the devaluing currency with loans to the U.S. government had sold all their remaining dollar holdings to anonymous corporate interests. Now those same governments, who still owned most of the U.S. debt called in their markers, draining what was left of the liquid federal reserves. All federal aid to local and state government agencies was immediately suspended. All federal workers were warned that their next payday would be their last until the budgetary crisis was solved.

At first, the local and state governments exhibited little urgency to find alternate means of funding their day-to-day operations. It was not the first Federal budgetary crisis declared even within the previous decade, and Congress gave no overt indication this particular crisis was any more precipitous. Most governors and state legislators viewed the crisis as a sly political ploy to extract concessions from the minority power. But after three months of debate, Congress shuttered its doors for the winter session with no solution. Partisan sniping continued in the press over the holidays and into the January Congressional session. The bureaucrats at state and local levels continued ignoring the crisis, operating at previous budgetary levels with no regard to the dwindling coffers. By the time Easter weekend rolled around, civil administration around the country began running in the red. By May 1st of 2027, there was simply no money left. Police Departments, sewage, waste management, and every level of state and local government were forced to operate on skeleton crews. Most workers were sent home without pay indefinitely. Soon, even those allowed to work began to walk off the job in appreciable numbers, and those left at home began seeking other employment.

Law enforcement agencies around the country went on strike to protest the crushing hours and lack of pay. The most disastrous strikes were in Los Angeles and New York, with barely 10% of the force on the job on any given day. Corporations around the country, seeing the writing on the wall, began hiring out of work police officers to secure corporate assets. Those officers who crossed strike lines worked for nothing, with even fewer resources than before. Ammunition for service weapons, fuel for patrol cars, everything was rationed to the bone. The crime rate skyrocketed with minimal police presence on the streets. In June, the California welfare offices closed their doors, and the lower income communities in Los Angeles and San Francisco began to run out of food. Food stamps, welfare checks and all government subsidy food shipments ceased. The combination of scarce food supplies and the hottest summer in twenty years created a simmering cauldron waiting to explode.

One small incident was all that was required to set off the firestorm, and that incident became known as the Jackson 5 Incident. Five African-American youths were gunned down outside a convenience store by two Caucasian policemen. The officers claimed the youths were attempting to rob the owner, a Korean immigrant who was later killed in the riots. Witnesses claimed the youths were arguing with the owner over change owed to one of their number. Words were exchanged, violence threatened, and the police were called. By the time the overworked policemen arrived on the scene, violence was imminent. The officers testified that one of the youths brandished a firearm, but the witnesses dispute that claim to this day. The youths were killed, and the resulting backlash was the ‘27 Riots.

The ’27 Riots were the worst since the Watts Riots of the 20th century. Los Angeles became a battleground. Repeated requests from the Mayor of Los Angeles, Creed Layton, for a National Guard presence were denied. Layton declared martial law anyway, but without federal or state troops to enforce the order, the job fell to the embattled Los Angeles Police Department. With LAPD already the target of so much mistrust and hatred, this only served to fuel further violence, which was now directed at the department itself. Most police facilities were besieged by rioters, organized by GlobalNet circles and armed with military-grade weaponry, the source of which is still under investigation. After three weeks, the riots had claimed the lives of 76 officers and 1358 civilians, with billions in property damage.

The morning of August 17th, 2027 brought news of a compromise. The U.S. Congress, besieged by empty federal coffers, the target of press recriminations, and under threat of revolutionary violence, had turned to its corporate backers for the solution. Congress entrusted corporate security firms with emergency powers to quell the immediate crises in the areas surrounding corporate headquarters such as Chronosoft’s headquarters in Los Angeles. Once peace was restored, the corporations would be allowed to bid on Local Governance Licenses, or LGL’s. Chronosoft, one of the largest multinational corporations based in the Southern California area won the bid for the parcel of land from Los Angeles County south to Baja, gaining control over all civil administration including law enforcement. Within three days, the riots were over. The Private Sector Act of 2027 passed by a unanimous vote, giving LGL corporations the power to run local and state government agencies as they saw fit, and to collect local and state taxes to pay for those agencies. Federal law still held jurisdiction over the LGL’s as well as between LGL districts. In exchange, the corporations agreed to subsidize the federal government’s expenditures when needed to maintain the efficient operation of the federal, state and local governments. Each LGL would be up for renewal after the first three years; failure to meet certain criteria in efficiency, crime and social administration would open the license up to a new round of bidding.

The law allowed the LGL to appoint a city government to serve on an interim basis for no longer than one year. Oliver Sunderland, a former City Councilman, was appointed mayor of Los Angeles, with a six-person City Council appointed in an advisory position. The mayoral elections of 2028 are scheduled for September 1st, and along with a new mayor will come a new City Council, which will serve the same legislative function as the pre-LGL Council. Mayor Sunderland is running against the challenger Arturo Soto, a Hispanic community leader who emerged from the riots as a defender of his neighborhood and something of a local folk hero.

Chronosoft created the Chronosoft Legal Enforcement Division, or CLED, in October 2027 to replace the LAPD. It has been heraladed as the model of civil law enforcement efficiency among LGL’s, reducing crime rates by 20% since inception. Running on the principles of profit-driven incetivism, where profit is measured in terms of convictions, CLED is gaining a reputation as a hard-nosed but efficient law enforcement division that maintains peace in the still-volatile Chronosoft LGL.

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