Path Is Sought for States to Escape Debt Burdens

Path Is Sought for States to Escape Debt Burdens

www.nytimes.com

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.



Stephen Crowley/The New York Times
Senator John Cornyn asked this month whether Congress should consider establishing a bankruptcy procedure for states.

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First it was the Municipal Governments that have sought after
bankruptcy now itsstate governments.I guess its safe to assume that the United States is in a sort of financial pickle.

How does a entire state file for bankruptcy and have that not affect the cities within that state.Is not the Federal Gov.
duty to look after the welfare of its states.

and if so if there is no federal aid then should that state be it;s own entity if the Feds,can offer no aid

www.nytimes.com
(visit the link for the full news article)

reply to post by alchemist2012
It mentions the pensions for retired workers. I wonder if the state controllers and accountants really do a good job accounting for what hiring a new employee is going to cost the state when the pension is taken into account? I'm sure they accurately account for current pensions being paid out, but do they carry on their books the liability they occur for future pension payments as they accrue? And if not is this an accounting blunder that partially explains the crisis? I don't know, but I always see these pensions mentioned like in this article as if they are some huge unexpected burden.

Only in a crime run mafia hooligan state like the Phillipines would such a thing be thinkable. Nope this is public funds, the citizens are still working, they're staying paying their taxes, so scrap all the corporations and middle men and get some real economies going with small business start ups and people buying and selling from each other, and boycott all the corporations.

These guys are only public servants, ears, not mouths, they don't get a say.

Open Fort Knox... sell off gold like they did in the early eighties... Voila!!! Debt gone and the rich gold investors wiped out overnight

But gimme a few weeks so I can sell all mine while prices are still up there

The beginning of the end, brought to you by liberal spending, progressive agendas and corrupt labor unions.

They can't cut spending, so let them do a bankruptcy?

What about the states deeply in debt to banks and financial institutions?

What happens to them when states are forgiven hundreds of billions worth of debt?

No matter how this goes it will not go well...

Guess who will suffer most in the end?

Maybe the Fed should consider selling states in bankruptcy to China?

Hey, that could work.

One major advantage of bankruptcy is the court can nullify the existing contracts with the unions. If this is done, it forces the unions to renegotiate or, creates the opportunity for an open shop environment.

One legitimate reason these pensions are so underfunded is they were counting on accumulated interest on investments to cover part of the cost. With the meltdown in the market not only were the rates they had been anticipating crushed... the principal was wiped out too. I'm sure too that when a lot of these pensions were intitiated life expectancy wasn't what it is today.

I've no doubt though, promises were made that the signers at the time knew couldn't be kept. Some of these pensions are beyond unfundable. I've heard of some where an employee gets a pension equal to their average earnings in their last year or two of employment and some of these pensioners are eligible after 15 or 20 years of service having made little or no contribution of their own.

One very anti-union economist that is very outspoken about his disdain is Mike "Mish" Shedlock. He has a really informative blog and provides a lot of insight into these problems in very down to earth laymans terms.

Originally posted by Arbitrageur
reply to post by alchemist2012

 

It mentions the pensions for retired workers. I wonder if the state controllers and accountants really do a good job accounting for what hiring a new employee is going to cost the state when the pension is taken into account? I'm sure they accurately account for current pensions being paid out, but do they carry on their books the liability they occur for future pension payments as they accrue? And if not is this an accounting blunder that partially explains the crisis? I don't know, but I always see these pensions mentioned like in this article as if they are some huge unexpected burden.

It would be very interesting to see the books. Budgets can be twisted to create deficits on paper... Start with 100k in the bank, create a 50k budget, spend 60k, and what do you know... 10k deficit while there's 40k sitting in the bank. Nothing funny about the math, but it sure is deceiving when finances are being cut. Especially in route to pensions and public service we've paid taxes to fund.

reply to post by Fractured.Facade


I'd be a rich man, if you paid me for your usage of liberal... I think your facade has become a smoke screen. You've lost sight of a few factors. Take trickle down economics for starters. It only took a decade of deregulations to start wrenching down the leak. Where does that money go? 12 cents on every dollar is locked up with the top level 1/10th of 1 percent. Now what were you saying about social unity? I didn't quite catch that!

Originally posted by Americanist
reply to post by Fractured.Facade

 

I'd be a rich man, if you paid me for your usage of liberal... I think your facade has become a smoke screen. You've lost sight of a few factors. Take trickle down economics for starters. It only took a decade of deregulations to start wrenching down the leak. Where does that money go? 12 cents on every dollar is locked up with the top level 1/10th of 1 percent. Now what were you saying about social unity? I didn't quite catch that!

So, what is this then?

Trickle down debt?

Open Fort Knox... sell off gold like they did in the early eighties... Voila!!! Debt gone and the rich gold investors wiped out overnight

Yeah, time to sell the Chinese some more lead bars with gold-plating...

Originally posted by Fractured.Facade

Originally posted by Americanist
reply to post by Fractured.Facade

 

I'd be a rich man, if you paid me for your usage of liberal... I think your facade has become a smoke screen. You've lost sight of a few factors. Take trickle down economics for starters. It only took a decade of deregulations to start wrenching down the leak. Where does that money go? 12 cents on every dollar is locked up with the top level 1/10th of 1 percent. Now what were you saying about social unity? I didn't quite catch that!

So, what is this then?

Trickle down debt?

It's a ponzi scheme plain and simple. I was under the impression you'd done enough research... There's a recent short cartoon which may catch you up to speed:

"That's my dog!"

Stop wasting money putting people in prison and jail for so-called "crimes".

Put them to WORK making infrastructure that reduces the debt and restores American Power.

Originally posted by Chakotay
Stop wasting money putting people in prison and jail for so-called "crimes".

Put them to WORK making infrastructure that reduces the debt and restores American Power.

Prison has become privatized too, so the same cartel running the banks turn profit on siphoning money from tax payers for more prisoners. This scheme starting to come into full view yet?

reply to post by alchemist2012


For the Love of God... Its called a BUDGET. If you have enough money, and the purchase is absolutely needed, plan ahead and budget for it. If you can't aford it, don't buy it. Don't rob peter and paul to float a loan to mary to pay off a 40 year old debt.

Live within your means. If you impose a Tax, the people must approve it, and it can only be spent on what the tax is intended for (Listen up California - This does not cover SEX CHANGE OPERATIONS). If your pissed you were born male, thats your problem, not the taxpayers.

If you spend more than you take in, The people will throw a party that makes the death of Marie Antoinette look like a sunday prayer service.

In other words, fix your rectal-cranial inversion, get spending under control, live within a budget, or dont and go to jail and face prison time like you impose on the rest of the population when they spend more than they can afford and can't pay bills.

reply to post by Xcathdra


Seems like it would be that simple doesnt it.

reply to post by lastrebel


Since its that easy for those of us who work for a living yeah. To those people in Congress who view their positions as royalty instead of the peoples representatives and subordinate to the same, its rocket science.

It reminds me of the math problem a College teachergave to a room full of 3rd graders and a room full of Engineering students.

The question given to both groups was how do you fit an elephant into this refridgerator that is 8 feet high, 4 feet wide and 4 feet deep.

All the Engineering students gave long drawn out answers using math, science and fractel geometry.

The 3rds graders all had the right answer - An elephant can't fit into the refridgerator.

The solution is simple, cut spending down to the absolute neccisary, drop wasteful spending (to those in civil service who feels they should make 2-10 times more than the private sector, you get hit in the head with a tack hammer because your stupid), get union contracts under control, quit reinventing the wheel every 30 days, and listen to your bosses.. you know, the people who you rob to pay for your trips overseas under the guise of drumming up business for your state, because apparently when the Constitution says only the President and Congress can perform foreign diplomacy and approve agreements, they must of been using the same BS schooil books we use now. School books are important, if for no other reason that they would place the town of Kittyhawk in North Carolina and not South Carolina.

meh.... I digress...

Obi wan kenobi had it right... Whose the more foolish, the fool or the fool who follows him...