Gingrich Pushing Bill To Allow States To Declare Bankruptcy

[mrjarrell]

Holy smokes. Is this guy and his friends insane? They won't have to worry about the average Joes getting upset with things. They'll be fighting off government employees and retirees with pitchforks and torches. Passage of a bill like this would mean the end of the gop. And I even hate to think what it would mean for the economy as states line up to default on their debt.

Newt Gingrich Pushing Bill To Allow States To File Bankruptcy Allowing Them To Renege On Pension And Benefit Obligations | zero hedge

 

[machete]

great,,,so the citizens of one state that is frugal have to pick up the tab for the out of control spending of another...

and dont get all proud red states,,,the blue states pay more in taxes than they get,,,while the red states get more in taxes than they pay,,,usually the bluer the more ripped off and the redder the more they suck the tax dollars...

cali really gets the short end...

i shouldnt be surprised,,,i dont think the republicans and the tea partiers care about limited government,,,at all...

if each state is paying for every other state,,,why not get rid of the states alltogether???

 

[rambone]

great,,,so the citizens of one state that is frugal have to pick up the tab for the out of control spending of another...

Is this accurate? It sounded more like states would be getting off the hook for obligations altogether -- not getting bailed out from other states. I didn't read very far though.

 

[machete]

Is this accurate? It sounded more like states would be getting off the hook for obligations altogether -- not getting bailed out from other states. I didn't read very far though.

generally,,,in bk everyone answers upward... so i guessed the us gov will answer for the states... if not,,,then every states credit rating is about to get shot,,,because a state will be able to discharge and there will not be any recourse...which is a good thing,,,it will keep the states from borrowing money cheap...so theyll have to mind their spending...

ill back newt if he just wants to let the states drop these pensions down a well and protect the taxpayers from having to pay them...

im all in favor is cop pensions being completely dumped,,,those things were not salary setasides,,,like a retirement plan is supposed to be...those pensions are straight very expensive welfare payments from the taxpayers to the cops that were far greater than any salary setaside... which was usually none...

those cop pensions were immoral,,,and its time that the taxpayers were let off the hook for the stealing that the public employees did in the form of these pensions...

im even happier if the us gov isnt going to come along and pay the pensions with US funds...

 

[Leadeye]

A question I would have to ask would be what sort of legal procedure exists for an insolvent state. I remember the NYC bankruptcy in the 70s was set off by the city's inability to sell it's bonds at any rate of return. Investors simply refused to buy them shutting off thier ability to borrow. NYC had to go to the fed and state and get them to buy the bonds or at least back them. While NYC never admitted to it, they went through a "bankruptcy" where debt obligation payments were revalued and rescheduled just like any other default.

NYC was small change compared to the problem in CA. Without some legal way to reschedule and revalue exisiting debt the state would be in a position where the unknown will scare away lenders. Banks would be reluctant to accept deposits from customers paid by the state without some legally binding value of what that state check really is.

The federal government will probably just step in and backstop all the debt after some expensive legal wrangeling. Pension payments may be rescheduled and revalued, but I think this is mostly political noise at the moment.

 

[PaulJF]

States should be forced to sell off all surplus property, real estate holdings, and cut services to only the essential, in order to meet their obligations.

 

[machete]

States should be forced to sell off all surplus property, real estate holdings, and cut services to only the essential, in order to meet their obligations.

nope,,, i dont want to lose my snowplow because some public employees gave themselves immoral benefits that broke the state and were so excessive that no public servant should be entitled to...

my advice to public employees is to start looking at a ira,,,like the rest of us... when we all figure out that we cant afford those royal pensions and drop them down a well,,, at least youll have a backup plan...

 

[CarmelHP]

States should be forced to sell off all surplus property, real estate holdings, and cut services to only the essential, in order to meet their obligations.

Why? I would assume it would work like a Chap 9 municipal bankruptcy. There is no liquidation requirement in Chap 9. Debts can be reduced or eliminated or restructured.

 

[mrjarrell]

Why? I would assume it would work like a Chap 9 municipal bankruptcy. There is no liquidation requirement in Chap 9. Debts can be reduced or eliminated or restructured.

I think he meant instead of declaring bankruptcy, not as a part of any bankruptcy.

 

[Johnny C]

I have heard rumblings about states letting counties do the same thing...The caveat? they give up a lot of control to the state!

I cant but put 2 and 2 together and wonder if a state declares bankruptcy that the Feds get more control over that state, you know the feds will!

Goodby states rights (as if we have many states rights now)

 

[lane440]

Just a ploy to reduce puplic services and raise taxes , after stealing from the cookie jar ,over and over and over . I dont have a problem being a honest hard working tax payer but this is starting to feel like .... OUCH !!!

 

[dwagner3701]

If they let the states file bankruptcy the fed is not obligated to bail them out. This way the sate can get out of all of the union contracts and pensions. It will suck for those that live in those states...but it will be better for the rest of us. Who wants to pay for Cal., IL., and MI. liberal govts. Not me.

 

[John Galt]

It find it as sad as it is true that the states that are insolvent aren't changing the practices that landed them in that position. Debt is nothing more than a spending problem, no more, no less. The Laws of Nature apply to all - individuals, states and countries. Nature's Law will always win out in the end.
As a Hoosier, I don't want to bail out Cali, Illinois, NY or anyone that can't exercise fiscal responsibility. I don't want to bail out states, corporations or individuals that exercise poor decision making, as this only enables that type of mentality and then we end up where we are. Our society is so distorted and out of whack right now that if we ever can right this ship, the realignment is going to be painful, but it is absolutely necessary. Either that, or we crash, as I don't see America doing anything half-ass, as it's usually all-or-nothing!

 

[machete]

As a Hoosier, I don't want to bail out Cali, Illinois, NY or anyone that can't exercise fiscal responsibility.

those three states are fiscally responsible---theyre just being bled dry by their money being given to red states by the feds...

 

[Zimm1001]

As I understand it (and I could be wrong) by filing bankruptcy would allow the State to negate any contracts and allow them to renegotiate all contracts including union contracts.

The big reason is the huge unfunded pension liabilities. Please no nasty responses. I am not anti-union nor am I for them. The fact is some Unions did too good of job buying votes and structuring pensions that could not ever be funded. Now it has caught up and something has to be done or they go insolvent. That is the reason for allowing States or even the Fed to go into bankruptcy.

Understand this is not an anti union response. They are all responsible. The politicians and Union leadership and all of us for allowing our representatives to do this year after year. Both sides of the aisle. etc. etc.

 

[mrjarrell]

those three states are fiscally responsible---theyre just being bled dry by their money being given to red states by the feds...

You forgot to put that in purple. The evidence says differently.

 

[John Galt]

those three states are fiscally responsible---
those three states are fiscally responsible---
those three states are fiscally responsible---
those three states are fiscally responsible---

I tried, but I still can't make sense of that statement

 

[ol' trucker]

those three states are fiscally responsible---
those three states are fiscally responsible---
those three states are fiscally responsible---
those three states are fiscally responsible---

I tried, but I still can't make sense of that statement

The problem is....your not wearing Dorithys golden slippers

 

[machete]

You forgot to put that in purple. The evidence says differently.

no it dont

Ezra Klein - The red state ripoff

 

[ChrisK]

no it dont

Ezra Klein - The red state ripoff

That comes from the most liberal newspaper in the country. (Maybe second to the New York Times) Would not trust anything that is printed in that rag. BTW it was talking about Fed taxes not state. Those 3 states spending is worst in the country. Has nothing to do with what was in the article.