What happens when a state goes bankrupt?

[crash n burn]

Quote from endsongs:

Scataphagos - the federal gov't does not have an unlimited supply of $ to throw around. They already need to turn over ~$3T in treasury debt this year just to stay solvent. I think the states are on their own once the states finish wasting the stimulus money the federal gov't gave them.

LOL

money is created out of thin air

fed hits the keyboard and cali has its cash flow problems solved

the interest is paid in the exact same manner

as long as the USA is the world'd super power there is no limit to this cycle

that's why we bomb every nation in the world that challenges our status or hold important natural resources


and that's why spend more money in the military than in anything else

we dont have that kind of problem (bankruptcy).

 

[Scataphagos]

Quote from endsongs:

Scataphagos - the federal gov't does not have an unlimited supply of $ to throw around. They already need to turn over ~$3T in treasury debt this year just to stay solvent. I think the states are on their own once the states finish wasting the stimulus money the federal gov't gave them.

Personally, I hope you're right. SOME FRICKIN' BODY needs to pay the price for spendthrift profligacy.... but I doubt the Feds will allow any state to go down.

"No unlimited supply of money"... correct.

My bet is they will use it to keep ALL balls in the air until all come tumbling down.

 

[GTG]

This is somewhat of a non-issue. California is required by law to balance the budget.

I'm no accountant, but it seems to me that whenever I see projections for how much the state of CA is going to be required to add to the public employees pension fund that eventually the pension obligations will overwhelm the state budget and leave no room for anything else. Perhaps someone who has a better understanding of this issue can add some color onto whether or not this would be possible and when? Could it be possible that in order to pay out the pensions for current employees the 100% of the budget won't be enough some day down the line?

 

[endsongs]

The pension problems will be a burden for Ca definitely. But, legally, I thought it would be hard for a US state to declare bankruptcy because the states can collect taxes.

 

[swtrader]

I can understand why california's homeowners wanted to keep their taxes from going up with prop 13

and i can understand why they want cheap gardeners with illegal aliens

and i can see how liberals want to feel compasionate by ignoring the law and letting ilelgal aliens into their socials benefit system
'
but what i dont see, is how as a midwesterner how the problems all of this created are my responsibility

dont pass the fucking hat to me

 

[GTS]

http://www.dailyherald.com/story/?id=269994&src=109

State can run out of money, but can't file for bankruptcy

Facing an ever-growing pile of bills, crushing debt and less tax money flowing into the state treasury, Illinois is broke. But could the state climb out of its nearly $9 billion budget hole by declaring bankruptcy?

No, say tax and budget experts.

Federal law permits individuals, businesses and local governments to file for bankruptcy reorganization and sometimes debt forgiveness. States are not covered by the law. No U.S. state has ever declared bankruptcy.

 

[C#2.0]

Quote from Scataphagos:

My bet is they will use it to keep ALL balls in the air until all come tumbling down.

+1

Once upon a time I would not have believed you, and would say that you represent the extreme right in your comments and observations.

But now I know there is more than a grain of truth in your comments, and that you actually just represent (what used to be) good old american values.

 

[Scataphagos]

Quote from C#2.0:

+1

Once upon a time I would not have believed you, and would say that you represent the extreme right in your comments and observations.

But now I know there is more than a grain of truth in your comments, and that you actually just represent (what used to be) good old american values.

Good for you. FWIW.. I'm not extreme about anything... except for my hatred of lies, deception, self-serving greed, obsessive desire for power of government (Socialism in all of its names and forms).

If I must have a political label, it would be as Independent or Libertarian. I'm pro choice, "the government which governs least governs best", "you deserve ONLY what you earn for yourself" and for fiscal responsibility by all. Government deficits are amoral! And if the country were one of Darwinian Survival (aka, "if you can't provide for yourself and you can't get VOLUNTARY support from the generous, you might as well just die"), that would be OK by me.

I also lament the demise of our earlier "minimalist Federal government" and the designs of the Founding Fathers.

 

[Scataphagos]

Quote from swtrader:

"... what i dont see, is how as a midwesterner how the problems all of this created are my responsibility

dont pass the fucking hat to me

The government can rationalize "getting the money they want from anybody".... no "regular citizen" and his assets are safe.

 

[tomdavis]

Quote from swingtrader123:

That's not the entire cause. The main cause was Proposition 13 that limited taxation ... requiring 2/3 majority to raise taxes. Now the state can't raise taxes and the liberals don't want to cut benefits. What a way to run a government!

Proposition 13 is not the problem. Californian's have the 3rd highest per-capita tax burden in the country. I pay 10.3% personal income taxes and 9.5% sales taxes.

The real problem is that the California state legislature is radically anti-business. Business taxes are high (third highest in the country) and regulatory costs are the highest. Companies like Telmar Networks, Terumo Medical, Creel Printing and Stasis Engineering have left the state for good. Hewlett Packard, JC Penny, the Automobile Club of Southern California and other large corporations are moving thousands of jobs to Nevada, Texas and Tennessee. Even the entertainment business is moving operations (production/filming) out of the state. The result is 13.4% unemployment.

The state legislature has treated businesses as their personal ATM machines and nothing else. The problems we have now are the result of years of bad state management. And here's one more mind-blowing statistic that tells the story: California has 11% of the country's population and 32% of the nation's welfare recipients. If that isn't a recipe for disaster, I don't know what is.