It's going to get a lot worse before it gets better. Expect many many more. As Megan McArdle argues - in pursuit of "fairness" what the US and many other countries are about to get is a heavy load of justice.

Jefferson County, Alabama, commissioners voted 4-1 to file the largest U.S. municipal bankruptcy after reaching an impasse over concessions with holders of $3.14 billion of bonds.

JPMorgan Chase & Co. (JPM), which arranged most of the debt to fund a sewer renovation, will likely take the biggest loss in the process, which begins with a hearing 10 a.m. local time tomorrow.

A provisional agreement with creditors that commissioners approved in September included $1.1 billion in concessions and called for sewer-rate increases of as much as 8.2 percent for the first three years. The county, which encompasses the state’s largest city, Birmingham, couldn’t get signed commitments from creditors, Commission PresidentDavid Carrington said today.

In addition, the 25-member legislative delegation for the county was unable to unite behind bills needed to implement the tentative settlement.

“We’ve reached that last resort,” said Commissioner Joe Knight. “We could continue and keep kicking this can down the road, but I think the people of Jefferson County have had enough.”

Governor Robert Bentley, a Republican, said he was disappointed by the commission’s vote.