The State Bankruptcy Meme: How It's Metastasizing In The Media

Talk of introducing legislation allowing states to declare bankruptcy began in earnest in November. A speech by Newt Gingrich was followed up by a big Weekly Standard piece on the subject by David Skeel, and soon the meme filtered into the blogosphere. Unlike most political chatter, this kind of talk isn't cheap at all: it's very expensive. As the subject has refused to go away--which means, as House Republicans have continued to work on drafting some kind of bill--the municipal debt market has plunged.

Read the whole story: Reuters

Comments

[buckfalcon]

07:18 PM on 01/24/2011

I think this is great. The states that are poorly managed should file bankruptcy - and have their credit ratings adjusted appropriately. Then the states that are well run will reap the spoils that the poorly run states could not.

[rickroland]

07:21 PM on 01/24/2011

Well, they can't file for bankruptcy. But you can bet that they will do everything short of that to help right the legislative wrongs (as in massively over spending, massive borrowing, and the like). Or, both Democrats and Republicans both will be sent packing by the voters.

[Johnathan Plate]

12:38 PM on 01/22/2011

I really hope they are not serious about this.

I can't believe that a state which could raise taxes, could ever in a million years have a good reason to declare bankruptcy.

[sposton]

12:06 PM on 01/22/2011

We must realize that all of this has been created by an artificial scarcity of money. Sure, there is some imprudence but that is not the true cause. Always ask yourself "Who benefits?". That usually reveals the "hidden" aims. One aim is to finally kill unions in this country. Another aim is to privatize as many public assets as possible. When this is over, local and state governments will be in very similar condition - broke but without publicly owned assets. We will then pay for the same services double of we used to pay and that money will sucked out of our communities and even states.

We must learn to distinguish between causes of our problems and effects of those problems. The bankrupt local governments is just an effect of something else going wrong. Without tackling the true causes no real solutions are possible. When we institute austerity measures we must realize we are not tackling the root causes but effects.

The true causes of our trouble can be found in the nature of our money but that is supposed to remain hidden from us because it is at the core of our thieving economic system.

[redsquirell]

03:04 PM on 01/22/2011

http://whatreallyhappened.com/WRHARTICLES/wildbankers.php F&F

[sposton]

05:10 PM on 01/22/2011

Exactly right.

Here is an interesting reading - http://bit.ly/gcGs7e . American Revolution wasn't caused by tea taxes but by England taking away the colonial money. You won't learn that in school because they don't want you draw a parallel lesson for today.

[iridium53]

11:31 AM on 01/22/2011

If the Tea Party / GOP can threaten shutting down the Federal Government and defaulting on its obligations, then why can't the States do the same thing?

[rascalcat]

11:16 AM on 01/22/2011

The tr0lls are pointing to blue states as needing this, yet it is Republicans that are pushing for it.
 
Because they are concerned about the blue states?  Yeah, that's real likely.
 
It is because they want to break public unions.
 
The fact that it is John Cornyn and the Newt pushing for this is all you need to know.

[rascalcat]

11:12 AM on 01/22/2011

There seem to be many that are bitter because union members have pensions and they don't.
 
Missing here is the fact that most state employees work for less wages than they could make in the private sector.  They took these jobs for the pensions.
 
How would you like it if our financial institutions declared bankruptcy and you lost your 401K or savings.
 
It is the same thing.  These people worked for and are counting on these pensions.

[VirginiaJeff]

11:17 AM on 01/22/2011

 
Agreed.  I don't see how any company or government agency can complain about pensions.  It was their responsibility to plan for them properly; this isn't the fault of the employees who were told this would be a benefit of their work. 

[FranzLuchan]

10:43 AM on 01/22/2011

The only way to break the backs of the criminal unions and their ponzi schemes called 'pensions' is via bankruptcy.

Proof of this is the vitiol the jersey unions spewed when resented with having to Pony up a few extra bucks towards their benefits.

Bankrupt the states then repeal the laws allowing state and federal employees to unionize.

The experiment failed miserably.

[redsquirell]

03:32 PM on 01/22/2011

All unions are criminal? All pensions are "Ponzi schemes" , and New Jersey has it's own unions and based on this "information" we should let the States go bankrupt and not fulfull their obligations? Eh; think I'll check out the facts first. How about you?

[Its-All-Good]

09:49 AM on 01/22/2011

It's inevitable, the economy will not be able to heal, thrive and absorb the contracts in place.. simple addition and subtraction and subtraction and subtra... Here in California we've kicked the can down the road watching tax receipts in hopes of a pick-up, but not.

Best of luck to all!

[SoylentGreenIsPeople]

09:20 AM on 01/22/2011

They are trying to find ways to break Public Unions. If a state declares bankruptcy now the Banks have to take a loss on their bonds. They want the states to to declare bankruptcy to only lower wages and pensions of public workers and privatize municipal services like water and sewer service. What this means is much higher fees for water, sewer service, snow removal, parks etc. These are fees that will be enforced by the government but be given to private banks from workers with lower wages.

[eric14]

09:05 AM on 01/22/2011

From the Reuter's article:

It would be unwise to encourage states to abrogate their responsibilities by enacting a bankruptcy statute. States have adequate tools and means to meet their obligations.
-----------------------------------------
Interest rates are set to rise for next several years. Inflation warning lights are lit: commodity prices led by gold and oil then food are on the march upwards - a means of devaluing the dollar.

Would States have ''adequate tools and means'' if interest rate repayments on all their loans rose by 5%?

[themodernleader]

08:34 AM on 01/22/2011

   Those greedy, selfish, anti-American Republicans heading the worthless Republican agenda are always cooking schemes that throw all the pain of predatory capitalism on the backs of average citizens, pain that was inflicted because of their negligent, incompetent management of this Nation.  Bankruptcy would severely wreck havoc on our failing democracy and invite dictatorship and ruin. A bankrupt organization is a destroyed organization always.  
  The solution resides in common, universially shared  sacrifice based upon the principle of fairness and economic justice.  Any other way is the distruction of democracy.  Bankruptcy is the disapppearance of the organization.  The only leadership supporting such a nefarious strategy is a leadership of oligarchy and elite domination. Those Republican (and Democrat) leaders of such toxic solutions are dangerous leaders.

[eric14]

09:10 AM on 01/22/2011

Clear from Fox that bankrupting States is means whereby state pensions can be slashed.
The overall situation is even worse than you describe because there is so much debt around and also trillions of idle capital, millions unemployed.

Chinese economists on CCTV are always saying the U.S. should invest more in industry to create products and jobs. But what do they know?

[aynrandfan2012]

08:33 AM on 01/22/2011

Sorry....no more bailouts.....When a company makes mistakes....they go under....something is wrong....they are not making the right goods,or providing services cheap enough...companies with big profits....are busy because they have the best and the cheapest goods.....bailing out their peers does nothing but raise prices,and halts progress....dragging down all citizens (but hurts the poor the most)....BUCK UP STATES.....find your mistakes and fix them.....dont drag down the nation because of YOUR failures......Just think if we bailed out the horse and buggy....when the evil cars came to be

[Justjack1]

05:25 AM on 01/22/2011

Looks like the GOP is finally gonna be called out on what is obvious less tax equals less money, which equals no money to run the business we call our country. They have for to long had the simple minded believing their faux-logic. Its like us as a worker telling our boss that we want less money to live on plain and simple.

[Ron Battista II]

02:45 AM on 01/22/2011

Why do we keep calling things like this "memes" when they are just lies? I have never understood this. I really want this term to leave the lexicon until someone puts it in the right context.

[Timma]

04:23 PM on 01/22/2011

It's a perfectly good term and used properly in the headline.

[Ron Battista II]

04:37 PM on 01/22/2011

Not as far as I know. I don't know what any of this has to do with my evolutionary survival, so we do not have a "meme" here.

[costellowriter]

02:32 AM on 01/22/2011

The corporate elite are determined to destroy America, so that once they have done the same thing to other countries, they can come and do it to us again.
http://socyberty.com/economics/murder-of-the-middle-class/