Illinois Headed To Bankruptcy

[mrjarrell]

I have to wonder how much chaos this will engender? And how much spillover will we in Indiana see when they have to stop paying their cops. Will they have to close down the prisons and release those incarcerated? Guess we'll have to wait and see just how bad it gets. My guess is they'll go crazy and start feeding off the people in the state to keep their cancer intact.

From NBC Chicago

Illinois’ finances are in dire straights.
Some fear the state is a hair’s breath from (gasp!) bankruptcy.
"We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago told Crain’s Chicago Business.
Bankruptcy is defined as an inability to pay debts out of current assets, and it’s no secret that Illinois can’t pay its bills. The latest count puts Illinois’ unpaid bills at around $5 billion – a contentious fact among the state’s gubernatorial hopefuls.
The question is: what can Illinois do about its near-bankrupt status?
Answer: not much.
Federal bankruptcy protection doesn’t apply to states, so there's no way for Illinois to hide from its creditors. And none of Illinois politicians are willing to make the tough choices needed to close the budget gap, like raising taxes or cutting spending, Crain’s notes.

Read the rest at the source.

 

[Joe Williams]

I have to wonder how much chaos this will engender? And how much spillover will we in Indiana see when they have to stop paying their cops. Will they have to close down the prisons and release those incarcerated? Guess we'll have to wait and see just how bad it gets. My guess is they'll go crazy and start feeding off the people in the state to keep their cancer intact.

snip.

Sounds like anarchy. I should think you would be happy.

 

[mrjarrell]

Sounds like anarchy. I should think you would be happy.

You're confusing chaos and anarchy. The two aren't the same thing. We look for an orderly dissolution, not abrupt and chaotic. That said, I wouldn't lament the demise of their cancerous government in the least. Especially if it never came back in any involuntary form.

 

[SSGSAD]

Well, there you go, good ole LIBERALISM at work, or is it crooked chicago politics..... and someone elected "him" pres...????? !!!!!

 

[5.56'aholic]

Well, there you go, good ole LIBERALISM at work, or is it crooked chicago politics..... and someone elected "him" pres...????? !!!!!

Agreed, you can only hide the government shell game of moving the money around for so long. Eventually someone will open the lid on the "cooked" books, and find the money has been gone a long time.

 

[Cat-Herder]

i think it's apt: Play stupid games, win stupid prizes.

 

[whiskeytangofoxtrot]

Great, I don't want all the riff-raff spilling over into our property. Might be time to install that alarm system, because they will release prisoners like they did a few years ago. Now Danville, IL is full of what they released. Gonna get interesting...

 

[hornadylnl]

"We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago told Crain’s Chicago Business.

The biggest thing I took from this story is the above. Stakeholders are those who are actually footing the bill. The tone of this article to me says that the producers are the ones given the responsibility of fixing the mess and letting the welfare queens off the hook. We all know that's the case but it's good to see someone in the media actually point it out.

 

[Glock21]

It's a mess, no doubt.


First - It couldn't happen to a nicer place!


Second - States may not be protected with bankruptcy laws, but just try collecting when they owe you money.

Third - The IL State Police are the only ones really relying on state funds. Granted, some local departments engage in state training programs, etc., but for the most part the police are funded by the cities and counties that employ them. Then again, a lot of those cities and counties are going broke too, so, perhaps it's the same difference.

The jails are county, the prisons are state. So, we may have a little problem with the state prisons, but not to the point that I predict any kind of opening of the gates. Then again, we all might be fighting over food a year from now, so who knows.

Forth - Illinois may be in trouble, but the whole country is, and so is the whole world for that matter. The economic situation is far bigger and worse than just Illinois. Illinois problems are just a micro-example of the entire cancer we all are faced with. So, those in Indiana may assume they are somehow insulated from the whole thing, or worry about "spill over" from some other place, but when the rubber hits the road Indiana residents still value thier property in the same US Dollar the rest of us do, and I'm sure your state government, and your banks, have been cooking the books on their derivatives investments just like all the other states and banks have been. So, it's probably just a matter of time for all of us - welcome to the terrordome! lol

 

[hornadylnl]

Forth - Illinois may be in trouble, but the whole country is, and so is the whole world for that matter. The economic situation is far bigger and worse than just Illinois. Illinois problems are just a micro-example of the entire cancer we all are faced with. So, those in Indiana may assume they are somehow insulated from the whole thing, or worry about "spill over" from some other place, but when the rubber hits the road Indiana residents still value thier property in the same US Dollar the rest of us do, and I'm sure your state government, and your banks, have been cooking the books on their derivatives investments just like all the other states and banks have been. So, it's probably just a matter of time for all of us - welcome to the terrordome! lol

And there are those on here who believe having Mitch Daniels as governor puts us in worse shape than other states but that clearly isn't the case.

They'll empty those prisons before they reduce a dime in welfare. Releasing prisoners will cost them fewer votes than taking away welfare checks.

 

[BIG TIM]

Other losers to an Illinois default would also be Illinois municipal bond holders including many retirement accounts thru-out the United States. Most likely, the Federal government will rescue them from a potential default. Many thanks to all of us unwilling donors. California would likely follow suit. Who knows which state would be next!

 

[hornadylnl]

Does anyone who supported the bail outs still wonder how they perpetuate the problem of spending more than you take in?

 

[jblomenberg16]

Exactly. Further proof we can't spend our way out of debt.

Kommifornia knows first hand, and now Illinois. Stay tuned folks...I think more is to come.

What I think will be interesting is that at the basic fundamental level, when a company goes bankrupt, the assetts are divided amoung shareholders (owners). Sometimes another company comes in and buys them cheaply on liquidation so that the share owners get cash instead of 1/10,000 of an assett that is otherwise worthless to them (like a large machine, etc.)

And yes, we all know about the recent TARP program from our Federal Government that bought up similar troubled assetts.

So what happens when a State is "liquidated?" Who gets the assets? Do other states get to come in and get to buy them? Would parts of Illinois be absorbed by surrounding states? What if the Federal government comes in? How does that affect the status of Statehood? What about the state's elected officials?

 

[hornadylnl]

So what happens when a State is "liquidated?" Who gets the assets? Do other states get to come in and get to buy them? Would parts of Illinois be absorbed by surrounding states? What if the Federal government comes in? How does that affect the status of Statehood? What about the state's elected officials?

No, the rest of us states with governors like Mitch Daniels who understands that you can't spend more than you make will get to foot the bill. Just like us responsible people who go to work and pay their bills get to pay for those who stay at home or use their credit cards with reckless abandon. You know, like the credit card bill of rights, etc. Limit the bank's ability to recover money from those who owe it and force them to raise fees on everyone to make up the shortfall.

This administration and congress has set the blueprint for the private sector in the last year. What makes you think they will handle bankrupt states any differently?

 

[edsinger]

This administration and congress has set the blueprint for the private sector in the last year. What makes you think they will handle bankrupt states any differently?

^^ THIS ^^

Including Kaulifornia

 

[jblomenberg16]

Kind of my point. My questions were very much rhetorical in nature in that we've seen how bailouts are handled, and a state will be much the same. There is no reason to think that Illinois will reap what they've sowed and go through the consequences that result from poor decisions.

As you say, the responsible ones will be left to pick up the slack. I think prime examples will be transfer of prisoners to prisons in other surrounding states, who are as a result funding the operation of said prisons.

We'll also see many of the rats start jumping off the ship. By that I mean those that rely on public assistance will find another public to assist them - if Big Brother Gubment doesn't take them in.

We'll litterally see a migration of folks into the surrounding states (probably the boarder cities at first) where they will set up shop and start the process of filing for public assistance.

 

[ocsdor]

I would like to see a major crime spree break out (in Chicago) to the point that people realize the only way to protect themselves is with the use of personal firearms. The best way for people to regain the freedoms they lost (or were born without) is for the fascist Illinois governments to collapse financially. IMHO.

 

[nawainwright]

see, I have a theory.....we can absorb everything south of I-80 "supersize indiana" then let wisconsin have the rest, they have similar politics and policies

 

[mettle]

Wasn't there a 'threat' of this last year? I thought I remembered something like this before, from Illinois or Indiana?

 

[Denny347]

Yup, I am certain that this state would be MUCH worse off if Daniels had not been elected. OUr budget is getting tight...but at least we still have a budget right? Does this story not sound alot like Robocop? Private company comes in a "buys" Detroit and runs it as a private business.