What Happens to States When They Run Out of Money?

This has been a can kicked down the road, ready to rear it's ugly head.
Covid was actually a blessing in disguise for some states. It delayed the inevitable and created Covid funds for non-covid needs.
I'm talking about Illinois, New York, New Jersey, etc. (Illinois especially)

I'm very familiar with Illinois. They are running out of money. It is pretty serious.
They also have one of the biggest population declines. Taxes are going up, people are out.
That only means one thing. The people that are left have to hold the bill. The problem is that
most of the people left can't afford it. Yes there are wealthy pocket and rich companies, but I'm talking about the population as a whole.
It is a sinking ship.

So what happens?

Do the other states bail them out. Does the entire state declare bankruptcy?
From what I've read, bankruptcy is not possible, only Default. Is that just schematics?

Here's one example
www.illinoispolicy.org...

Illinois business leaders are worried after Springfield lawmakers twice passed a state budget, but neither time addresses the state’s Unemployment Insurance Trust Fund that is as much as $8 billion underwater.

How the heck can you pass a budget but not have money for said budget?!!
It is no wonder Illinois schools get an F for their Civics education. Maybe they are doing it on purpose.

No. The other states do not bail them out. With the amount of money these states are in hock, I'm not sure it's possible outside of the other states collapsing themselves.

And the problem travels up to the Federal level too.

I think they should just be allowed to fail. Maybe they should go into bankruptcy and be broken up into smaller pieces with some of those pieces being absorbed by neighbors and other bits reorganizing into new entities.

a reply to: ketsuko

I don’t know much about economics or government. But I do know somethings wrong when BP is too big to fail, but Illinois isn’t.

a reply to: ketsuko

I think they should just be allowed to fail. Maybe they should go into bankruptcy and be broken up into smaller pieces with some of those pieces being absorbed by neighbors and other bits reorganizing into new entities.

I totally agree. How weird would it be for Illinois to be absorbed by Missouri, Wisconsin, Indiana? I know Iowa and Kentucky are also bordering states but it seems less populated at those locations.

originally posted by: NotGuilty
a reply to: ketsuko

I don’t know much about economics or government. But I do know somethings wrong when BP is too big to fail, but Illinois isn’t.

Nothing should ever have been too big to fail.

a reply to: ketsuko

Agreed. Freedom includes freedom to fail.

originally posted by: ketsuko
No. The other states do not bail them out. With the amount of money these states are in hock, I'm not sure it's possible outside of the other states collapsing themselves.

And the problem travels up to the Federal level too.

I think they should just be allowed to fail. Maybe they should go into bankruptcy and be broken up into smaller pieces with some of those pieces being absorbed by neighbors and other bits reorganizing into new entities.

That’s reasonable, frankly a whole lot of us in S. Oregon and NorCal have wanted our own state and a divorce from Portland/Salem and San Francisco/ Sacramento for some time.

a reply to: JAGStorm

North Carolina has a surplus of...

6 billion clams...

and isn't sure what to do with it...

And "who" is it that is clueless as to what to do with $6 billion in revenue....

Seriously?

a reply to: JAGStorm

They file bankruptcy and default on their obligations.
Bye bye pensions…

no more cops, no more firemen, no judges, no jury, no school, etc...

will it come to this? yeah probably. this is why you want cash, silver, gold, and bitcoin.

originally posted by: ketsuko

originally posted by: NotGuilty
a reply to: ketsuko

I don’t know much about economics or government. But I do know somethings wrong when BP is too big to fail, but Illinois isn’t.

Nothing should ever have been too big to fail.

this is why we have never actually had capitalism. Capitalism would have allowed those business' to fail. What we have is corporate socialism.

a reply to: ketsuko

The federal gov. has already been bailing out poorly-run states (but I'm not sure if that will keep repeating...)

the U S is quickly becoming a roach motel, being subsidized more and more by the taxpayers like us..

What's worse, the powers that be are effectively replacing the old systems with a technocratic oligarchic system in which they use ideologies such as Marxism to subvert & brainwash the masses to take control from the inside.

A quick excerpt from David McAlvanyy discussing how the funds from several states currently employing "carbon credits" are used as redistribution of wealth, in the form of paying dividends specifically to certain demographics in the name of climate change prevention and "anti-racism" all at the same time (?):

And that’s what it seems like. The Whitehouse and Schatz proposal, plethora of redistribution schemes included to counterbalance the extreme, regressive nature of the carbon tax system. Because again, once implemented, the reality of higher energy costs, it’s funny, Washington doesn’t seem to be able to note that that is a part of the inflation equation, I’m not sure they can even spell inflation. But the reality of higher energy costs being passed through to society as a regressive tax, who does it hit most? Lower-income families. Hits them hardest on a relative basis. So the answer in a command and control system in this proposed legislation, when there is a negative implication coming from policy A, then it necessitates that you create policy B and C and D to counterbalance it. Handouts, that dividend check, 75% of the revenue that goes into the dividend check, it’s a part of the revenue redistribution to counteract the inflationary cost of energy and rising prices more generally.

Link: McAlvany Weekly Commentary - The Carbon Tax Inflation Equation

a reply to: JAGStorm

Every city is in debt.
Every province, and every state.
Every nation of the world is in debt.

But to whom ?

Those that create money out of thin air, like magicians.

Don't worry : they already have a plan of how to get repaid, convenient eh ?

Land.
They want your parks, green-spaces, public-spaces, public infrastructures, etc...
And they'll get it.

The WuWuFlu™ is an economic event, disguised as a pandemic.
Just like Climate-Change™ is an economic event, a wealth-transfer, disguised as a climate emergency.

The scam is called a debt-for-nature swap.

They're called the World Conservation Bank™, but seem to prefer to call themselves
The Global Environment Facility™, GEF™.

Never heard of the GEF, or debt-for-nature swaps, or the proceedings of the 4th Wilderness Congress? Of course you haven't. The powers-that-shouldn't-be have decided it's better for their scheme if you don't. After all, as David Lang was so quick to remind us at the 4th World Wilderness Congress, we're just the cannon fodder that unfortunately populates the earth.

But at least now you know what to answer when someone asks you what the second most powerful bank is.

Source : Minds.com, article by James Corbett.

Here is more from the out-of-place character in that story, from the 4th World Wilderness Congress that took place in Denver, Colorado, in 1987 :
George Hunt

a reply to: Nothin

exactly. this is the same Creature from Jekyll Island that has been doing this for more than a century now.

This is the biggest wealth transfer in the history of the planet happening right before our eyes while people argue about the vaccine and whether or not to get it.

This is going to be the great depression x 1000 only world wide. I think a lot of people are going to be taken by surprise.

a reply to: JAGStorm

Ask yourself how Britain could afford the second world war against Germany, and then after the War when they were broke spend millions on building new houses and rebuilding the bombed properties. They just print the money and have a controlled economy, then make sure things are rained back so the paper doesn't get too inflated. The rebuilding of Europe was the same but it had to use one currency with a controlled exchange rate, with the American dollar as the reserve currency. Along with American troops so if the governments got stupid and started printing their own money it could be nipped in the bud quickly. It's the same today, the only fly in the ointment is gold and silver, which is the only competition against the dollar, as long as its price is strictly controlled against the American dollar all will be well if someone gets too cocky like Gadafi they get a bit of bother. it's all BS.

a reply to: JAGStorm

Gary, Indiana has been absorbing individuals kicked out of Chicago for decades. That is why you find burned out churches with bars on the windows in Gary.

a reply to: FamCore

That was one of the biggest reasons I voted the way I did. I knew so much bailout was being snuck in under the label "COVID Relief".

originally posted by: EdisonintheFM
a reply to: JAGStorm

North Carolina has a surplus of...

6 billion clams...

and isn't sure what to do with it...

And "who" is it that is clueless as to what to do with $6 billion in revenue....

Seriously?

They reinvest it into NC and or reduce taxes. Not enable a failed State with failed policies.

originally posted by: ketsuko
I think they should just be allowed to fail. Maybe they should go into bankruptcy and be broken up into smaller pieces with some of those pieces being absorbed by neighbors and other bits reorganizing into new entities.

This is extremely sensible as a consequence, I like it. If you # up running ABC state bad enough to not be able to ever support itself, then the consequence should be the dissolution of said ABC state, and historical notation of it being a failed governance no different than a failed village being incorporated into the next town over.

a reply to: JAGStorm

It was seen as a cold-hearted statement, but Senator McConnell told states to declare bankruptcy if they mishandled their funds poorly over the years. Don't come to him using Covid-19 as a reason to request billions of dollars.