Could Poorly Managed States
End Up in Bankruptcy?
New York Sun,
by
Editorial
Original Article
Posted By: MissMolly,
4/24/2020 4:44:25 AM
Could the crisis over the coronavirus result in a new law providing a way for states to declare bankruptcy? It’s starting to look like the answer may be yes. That’s what we take from the comments today by Senator Mitch McConnell. The Senate majority leader, in a radio interview with Hugh Hewitt, is stating this flatly. He would, he says, “certainly” be “in favor of allowing states to use the bankruptcy route.”
That would represent a radical reform. The Constitution grants Congress the power to establish uniform laws for bankruptcies throughout the country. Yet the bankruptcy code lacks a chapter extending such protection to states, which might be why
Reply 1 - Posted by:
DCGIRL 4/24/2020 5:31:36 AM (No. 389602)
Yes. A lot of blue states may have to file for bankruptcy. The elaborate pension systems that they negotiated with the unions had these states committing financial suicide. Let them file for bankruptcy. This is a problem that was brought on by liberal governors and legislators.
13 people like this.
Reply 2 - Posted by:
WhamDBambam 4/24/2020 6:27:03 AM (No. 389624)
Who would ever buy another state-issued bond from a state that went the bankruptcy route?
4 people like this.
Reply 3 - Posted by:
DCGIRL 4/24/2020 7:00:53 AM (No. 389656)
Sorry for the second post.
#2, no one in their right mind would purchase the bonds of a bankrupt state. It proves that the state can not responsibly manage their budget and will continue to go down the drain. If they do file for bankruptcy, the judge may allow them to renegotiate their pensions. That would take guts and could be suicide for the democrat party. We are talking the teacher unions, legislators, etc.
7 people like this.
Reply 4 - Posted by:
jeffkinnh 4/24/2020 7:06:04 AM (No. 389659)
Let's be clear as to why these states went bankrupt, especially those with pension plan issues. The dems used state funding for public employees to BUY VOTES from public employees and their unions that funnel large amounts of money and support to dems. Contracts and extravagant retirement packages would be negotiated and approved by dem legislatures figuring they would be a problem for the future. Well, the future is now and it's time to pay the piper.
The coronavirus came about with perfect timing. Now dems can hide the bailouts for their Socialistic failures in the virus aid packages.
Here's a counter proposal, federal financial assistance for pension plans with the ELIMINATION of public employee unions; breaking the back of this graft system. Possibly replace the current union with one for negotiating contracts only but barred from any political actions.
The alternative is bankruptcy in which the state's contracted debt will be renegotiated and reduced, including pension reductions. The dems in charge will need to approve these cuts which will be perceived as dems reneging on their financial promises to the public employees.
To the dems, either of these solutions would be far worse than coronavirus. It would be an infectious disease with massive lethality, for dem politicians.
11 people like this.
Reply 5 - Posted by:
nina584 4/24/2020 7:16:09 AM (No. 389669)
Any good bond rep will tell you to stay away from NY,Connecticut and Illinois.
3 people like this.
Reply 6 - Posted by:
tootall 4/24/2020 8:03:23 AM (No. 389717)
I read this article, and it appears new laws would have to be written, and passed to allow States to do this. Furthermore, I believe defaults once occurred, and only lasted two years before they were struck down. It would appear that it would be Unconstitutional per the 11th Amendment, and there is precedence. I don't like the idea
1 person likes this.
Reply 7 - Posted by:
Strike3 4/24/2020 9:44:24 AM (No. 389838)
Yes they could and it's exactly what many of them deserve. The people elect democrats year after year because democrat-driven labor unions have control and the gimmedats like free stuff. The working people and homeowners see their taxes rise constantly but the state still manages to spend more than they extort from the people. Government grows and bureaucrats of no particular ability are set up to retire and live like the barons of old Europe after a life of doing practically nothing. Eventually the point of no return is reached, productive people and businesses can't take any more and the bloated government keeps on growing. A crash is often the best and only effective answer.
California, New York, Massachusetts, Illinois, New Jersey, Michigan. The names are familiar to everybody, the only question is which ones will implode first.
0 people like this.
Reply 8 - Posted by:
msjena 4/24/2020 12:08:36 PM (No. 390041)
Not without a change in the law.
0 people like this.
Reply 9 - Posted by:
judy 4/24/2020 12:28:26 PM (No. 390063)
If they are allowed to file bankruptcy they will be in the same situation next year....people don't change...the highest taxed states are the ones with highest debt...$$$ is not the answer...if you spend more than you take in you are doomed. Their answer to everything is to always increase taxes & never decrease spending....plus during this virus all states continue to pay their employees & people on assistant continue to receive their benefits. No sales tax or gasoline taxes are coming in. These Governors don't see any urgency to get their states back to work.
1 person likes this.
Reply 10 - Posted by:
24tea@Mag 4/24/2020 12:33:09 PM (No. 390067)
If states need a bailout of taxpayer dollars, we, the people, need accountability as to WHERE, WHEN, HOW, and with WHOM the money was spent. The states are Democratic governed and that should tell you a lot - no accountability in writing - NO money.
0 people like this.
Reply 11 - Posted by:
NorthernDog 4/24/2020 12:53:08 PM (No. 390084)
Local governments are also going to be under tremendous distress. Many have become addicted to local sales taxes and increasing property values pushing up property taxes. Those revenues are going to take a beating.
0 people like this.
Reply 12 - Posted by:
bighambone 4/24/2020 1:27:01 PM (No. 390120)
They could appoint Barack Obama as the “Receiver” for the liberal Democrat States that take the bankruptcy route. If that happened, what could go wrong?
1 person likes this.
Reply 13 - Posted by:
or gate 4/24/2020 1:50:47 PM (No. 390146)
cali for one
0 people like this.
Reply 14 - Posted by:
Penney 4/24/2020 2:02:44 PM (No. 390162)
Lefties always beg for more money when their policy choices have already drained the bank.
0 people like this.
Reply 15 - Posted by:
Foghorn 4/24/2020 5:44:06 PM (No. 390451)
They already are bankrupt in many cases because the unions have drained the states of revenue. FDR said never let the unions in government because soon they would be the government. That's happened in many cities and states. The USA is next.
0 people like this.
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