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Michael Barone thinks California and Illinois will be coming to Obama for a bailout (followed maybe by NY and NJ).
"But the Republican House is not likely to share that view, and it's hard to see how tapped-out state governments can get 60 votes in a 53-47 Democratic Senate."
A Pennsylvania law professor says Congress should pass a law allowing the states to file for bankruptcy.
"A state bankruptcy law would not let creditors thrust a state into bankruptcy -- that would violate state sovereignty. But it would allow a state government going into bankruptcy to force a "cram down," imposing a haircut on bondholders, and to rewrite its union contracts. The threat of bankruptcy would put a powerful weapon in the hands of governors and legislatures: They can tell their unions that they have to accept cuts now or face a much more dire fate in bankruptcy court."
Barone says the bailout argument for public employee union members is weak. What do you think?
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The only way for voters to learn is to allow the state to go bankrupt. Otherwise, they keep electing their same old tired politicians from their old tired political parties. Democratic & Republican voters will vote their party in no matter if they are heading for a train-wreck. After they are bankrupt, perhaps they will start voting Independent and fiscally minded politicians.
Agree. The public employee union members have been grotesquely gorging at the trough, bankrupting us all...
Quote:
A true financial valuation of unfunded pension liabilities reveals a debt of more than $200 billion for the state and local governments. That is around $42,000 per Illinois household and only counts benefits that public employees can claim based on today's pay and work history.
That's only based on current conditions. Pension benefits are frequently egregiously cranked up to much higher levels by cashing in unused vacation/sick pay, and obscenely high raises and bonuses in the final working years.
If they are stupid enough to elect those who put them into this position, then they should go bankrupt. Maybe that will learn 'em.
I doubt it. This is how Quinn got re-elected in Illinois:
Quote:
We don't know whom voters will choose as their next governor. Whoever that is, though, could be hamstrung by a terrible deal that Gov. Pat Quinn's administration is preparing to sign with the state's largest employee union. Under the tentative agreement, Quinn would agree not to lay off any of 50,000 unionized state workers, or close any facilities where they work, until at least mid-2012. That's about one-third of the way through the next gubernatorial term.
This fiasco, first reported Monday by Greg Hinz of Crain's Chicago Business, comes barely a week after the union that would benefit, the American Federation of State, County and Municipal Employees, endorsed Quinn for governor.
Governor Quinn, you cannot sell out Illinois taxpayers by committing them to payroll expenditures they may not be able to sustain. You cannot tie the hands of a future governor with a no-layoffs mandate. And you cannot consort in any such deal, in the wake of the union's endorsement of you, without inviting voters to conclude it was for your benefit, not theirs.
These dumb "California is going bankrupt" threads are tiresome as they are untrue. California's debt to GDP ratio is about 9% so they're in no danger of defaulting. Of course, there political log jam does mean we have a structural deficit and that it is hard to remedy but last election they changed the 2/3rds requirement to a simple majority for passing a budget should make it easier to address. Oh, and on that note the filibuster in the Federal Senate absolutely needs to be changed too. It isn't in the constitution and it has been changed over a dozen times in the past so it needs to be changed again.
These dumb "California is going bankrupt" threads are tiresome as they are untrue.
I had the same reaction. It's a dead horse that they keep beating. As usual, conservatives need an enemy to blame for everything, and lately, California has been their whipping boy.
The U.S. will never let any of its states fail - especially the largest state in the union. It would have a negative effect on the rest of the country, and it would set a bad precedent. The main reason California and Illinois are seen as enemies by conservatives is because those states usually vote for Democrats.
Illinois is a sovereign state and can do anything they want as long as 1)they keep their business in Illinois and 2)since I don't live in Illinois don't come looking to me for my money to bail them out.
No state is currently anywhere close to default or bankruptcy. Currently the state with the worst debt to GDP ratio is Kentucky at 27.51%, with Rhode Island close on its heels at 27.02%. Considering the federal government is close to 97% the worst state is still in much better shape than the country as a whole.
For the record Illinois has a ratio of 21.95% and California is at 18.81%. Wyoming is lowest at only 6.75%.
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