Let States Go Bankrupt

[ScreamingEagle]

After two years of bailouts, “stimulus” spending, TARP and earmarks, the country took a deep breath and is now beginning a discussion about the unsustainable trajectory of federal expenditures and the reforms necessary to right the country’s fiscal ship.

This is all good and healthy. However, Washington is not the only place with an overspending problem. We are now starting to see greater attention being paid to the dire financial straits of state governments — which pose just as grave a threat to the country.

New Jersey Gov. Chris Christie, who knows what it’s like to begin fixing a state where profligacy has carried the day for far too long, said on “60 Minutes” last Sunday, that, for states, the “day of reckoning has arrived.”

This day of reckoning has convinced policy experts, political observers and some on Capitol Hill that federal legislation allowing states to file bankruptcy might be the only way to avoid a federal bailout of the most fiscally reckless states in the union.

Opinion: Let states go bankrupt - Grover G. Norquist and Patrick Gleason - POLITICO.com

 

[Madeline]

Wow. Bankrupt states? That'd mean all the debt they owed was no longer collectible -- overdue Medicaid reimbursements, salary, benefits, overdue contract payments, etc.

My only complaint is, this doesn't distribute the pain fairly or rationally. But there will be pain -- there has to be.

Hang on to your hats time, I guess.

BTW, I think Christie rawks. The man tells the truth -- a rare quality in a politican. I wish he'd reconsider running for the presidency.

 

[Oddball]

Wow. Bankrupt states? That'd mean all the debt they owed was no longer collectible -- overdue Medicaid reimbursements, salary, benefits, overdue contract payments, etc.

My only complaint is, this doesn't distribute the pain fairly or rationally. But there will be pain -- there has to be.

That's what you get when people try to get everything at everyone else's expense.

I won't say I hate to say Itoldjaso, 'cause I love to say Itoldjaso.

 

[PoliticalChic]

After two years of bailouts, “stimulus” spending, TARP and earmarks, the country took a deep breath and is now beginning a discussion about the unsustainable trajectory of federal expenditures and the reforms necessary to right the country’s fiscal ship.

This is all good and healthy. However, Washington is not the only place with an overspending problem. We are now starting to see greater attention being paid to the dire financial straits of state governments — which pose just as grave a threat to the country.

New Jersey Gov. Chris Christie, who knows what it’s like to begin fixing a state where profligacy has carried the day for far too long, said on “60 Minutes” last Sunday, that, for states, the “day of reckoning has arrived.”

This day of reckoning has convinced policy experts, political observers and some on Capitol Hill that federal legislation allowing states to file bankruptcy might be the only way to avoid a federal bailout of the most fiscally reckless states in the union.

Opinion: Let states go bankrupt - Grover G. Norquist and Patrick Gleason - POLITICO.com

State, unlike federal, budgets, cannot run as deficits. “Virtually all states have balanced budget requirements, so they must take actions to close these deficits.” (State Budget Deficits for Fiscal Year 2004 are Huge and Growing, Revised 1/23/03) So, what to do? Simple: conjecture a better world!

a. In 2008, states reported that their public-employee pensions were underfunded by a total of $438 billion. But independent estimates say the underfunding is closer to $3 trillion. Why? The states make up estimates of return at unbelievable levels: the median investment return factored in by state pensions is 8% a year! AEI - The Market Value of Public-Sector Pension Deficits

b. “The official state estimate in underfunded pension liabilities to New Jersey’s public workers stands at $46 billion. It is one of the highest liabilities in the nation, averaging $5,200 per capita. The estimate is based on an assumed rate of return on pension assets of 8.25 percent –“ National Taxpayers Union - Overvalued and Underfunded: New Jersey?s Pension Time Bomb

c. Now, what happens if the state cannot pay the pensions? Taxpayers are legally obligated to make up any difference between what’s been promised and what can actually be paid. Pension Pulse: Pension Woes May Deepen Financial Crisis

Now, where is the government going to get all of the money necessary to cover the promises made to unions?

Have you seen this:
"Obama Administration begins the “grab” for retirement accounts

S 3760, introduced August 5 by Jeff Bingaman (D-N.M.) and John Kerry (D-Mass.) would require that employers of workers currently not covered by any retirement program pay 3% of compensation into mandatory, automatic IRA accounts. That would also have the effect of increasing the assets that the US government could then seize.

This is the Republican privatization of Social Security scheme trotted out during the Bush years, retooled and now focused on the private savings of the middle class. Now, instead of forcing you to invest any portion of your Social Security retirement in the stock market, a move which would have seen one of the greatest thefts of wealth and its redistribution to the crooks and thieves on Wall Street had they been successful, the Democrat faction has taken up the cause of confiscating private investment accounts to fund the rampant overspending of government using retirement savings of those who were able to contribute to 401(k) and IRA accounts and who have savings in private pension funds. "

Nationalized retirement accounts: The coming confiscation of the retirement savings of the middle class The PPJ Gazette


Or this:
"For some time, there have been rumblings that the federal government might try to solve its budgetary problems by nationalizing (i.e., stealing) the money that millions of Americans have set aside for retirement in 401(k) plans and the like. One way they might do this is to confiscate the cash on hand in exchange for a promise to make future payments in the form of an "annuity." An involuntary annuity, in that scenario."
Power Line - Are the Feds Trying to Nationalize Your Retirement Savings?

 

[Soggy in NOLA]

Part of the bankruptcy has to be a come to Jesus meeting over public employee pensions and other obligations. My gut tells me that somehow, vendors and muniholders will get the shaft (see GM bondholders for reference) and the pension obligations which are bankrupting them, will somehow get spared.

 

[Sallow]

Grover Norquist!!



Starve the beast!! Yahooo!

One of the biggest idiots out there..and very dangerous too.

Just recently a couple of towns stopped paying their city employees, pensions. And they've pulled a few of those ex-employees, like firechiefs and such..out of their apartments.

Dead.

 

[Oddball]

Awwwww......Ain't that too goddamn bad.

 

[Oddball]

Part of the bankruptcy has to be a come to Jesus meeting over public employee pensions and other obligations. My gut tells me that somehow, vendors and muniholders will get the shaft (see GM bondholders for reference) and the pension obligations which are bankrupting them, will somehow get spared.

Probably.

 

[Soggy in NOLA]

Grover Norquist!!



Starve the beast!! Yahooo!

One of the biggest idiots out there..and very dangerous too.

Just recently a couple of towns stopped paying their city employees, pensions. And they've pulled a few of those ex-employees, like firechiefs and such..out of their apartments.

Dead.

Tragic while that may be, there is an old saying.. "that which cannot continue, will not continue."

There ain't no mo money.

 

[Sallow]

Grover Norquist!!



Starve the beast!! Yahooo!

One of the biggest idiots out there..and very dangerous too.

Just recently a couple of towns stopped paying their city employees, pensions. And they've pulled a few of those ex-employees, like firechiefs and such..out of their apartments.

Dead.

Tragic while that may be, there is an old saying.. "that which cannot continue, will not continue."

There ain't no mo money.

If there's money to do a billion dollar deal with Raytheon to build missile defense systems that don't work..then there is money to pay the pensions of ex-firechiefs and other government employees..that PAID into the system.

 

[hortysir]

So why couldn't we have let GM, the banks and Wall St go bancrupt instead?

 

[iamwhatiseem]

One way or another the bills we get paid.
HOW they get paid is what we should all worry about.
In my opinion, the spectacular benefits must be cut, and that cut has to be retroactive to an extent.
Then, unfortunately, the federal government will borrow some more and we will see a mass bailout in 2011. It will be over a trillion dollars.

 

[LordBrownTrout]

States that are about to default need to pay off their creditors. It's simple. There are ways to pay it off but probably equally unpopular to their constituents. The people who live in these bankrupt states need to be demanding answers from their elected officials and looking at states that have surpluses and are doing quite well in this economy. Bailing them out is not the answer. They'll just do it again.

 

[Oddball]

One way or another the bills we get paid.
HOW they get paid is what we should all worry about.
In my opinion, the spectacular benefits must be cut, and that cut has to be retroactive to an extent.
Then, unfortunately, the federal government will borrow some more and we will see a mass bailout in 2011. It will be over a trillion dollars.

Meh....They'll just print up some more money.

No, seriously.

 

[Soggy in NOLA]

Grover Norquist!!



Starve the beast!! Yahooo!

One of the biggest idiots out there..and very dangerous too.

Just recently a couple of towns stopped paying their city employees, pensions. And they've pulled a few of those ex-employees, like firechiefs and such..out of their apartments.

Dead.

Tragic while that may be, there is an old saying.. "that which cannot continue, will not continue."

There ain't no mo money.

If there's money to do a billion dollar deal with Raytheon to build missile defense systems that don't work..then there is money to pay the pensions of ex-firechiefs and other government employees..that PAID into the system.

Psssst! There's no money for that either, yet that isn't why it was cut, we all know that.

And spare me the boo hoo over Fire Chiefs. Where I live these guys make MEGA BUCKS between salary and details and get very generous pensions that they DO NOT pay into. Many public servants collect pensions far longer than they worked.

 

[Soggy in NOLA]

One way or another the bills we get paid.
HOW they get paid is what we should all worry about.
In my opinion, the spectacular benefits must be cut, and that cut has to be retroactive to an extent.
Then, unfortunately, the federal government will borrow some more and we will see a mass bailout in 2011. It will be over a trillion dollars.

Meh....They'll just print up some more money.

No, seriously.

So, we're broke because we spent more than we had, borrowed to pay for it, can't service the debt, so let's borrow some more top pay for the aforementioned.

Sounds like a plan!

 

[LordBrownTrout]

Being responsible, accountable, and a balanced ledger always works, ALWAYS.

 

[Oddball]

Tragic while that may be, there is an old saying.. "that which cannot continue, will not continue."

There ain't no mo money.

If there's money to do a billion dollar deal with Raytheon to build missile defense systems that don't work..then there is money to pay the pensions of ex-firechiefs and other government employees..that PAID into the system.

Psssst! There's no money for that either, yet that isn't why it was cut, we all know that.

And spare me the boo hoo over Fire Chiefs. Where I live these guys make MEGA BUCKS between salary and details and get very generous pensions that they DO NOT pay into. Many public servants collect pensions far longer than they worked.

I have an uncle who is currently double-dipping (collecting both a pension and a paycheck from another gubmint job...In the same city, no less).

Nice guy, but fuck'im nonetheless.

 

[Soggy in NOLA]

So why couldn't we have let GM, the banks and Wall St go bancrupt instead?

That's what she said.....

 

[Soggy in NOLA]

If there's money to do a billion dollar deal with Raytheon to build missile defense systems that don't work..then there is money to pay the pensions of ex-firechiefs and other government employees..that PAID into the system.

Psssst! There's no money for that either, yet that isn't why it was cut, we all know that.

And spare me the boo hoo over Fire Chiefs. Where I live these guys make MEGA BUCKS between salary and details and get very generous pensions that they DO NOT pay into. Many public servants collect pensions far longer than they worked.

I have an uncle who is currently double-dipping (collecting both a pension and a paycheck from another gubmint job...In the same city, no less).

Nice guy, but fuck'im nonetheless.

They do that here in Jefferson Parish... retire from the Sheriff's office @45, then go work for the Parish is some other capacity... while collecting a pension AND salary.

AWESOME!