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IPFS News Link • Government Debt & Financing

Disturbing CFR Dream : Newt Gingrich Pushing for State Bankruptcies

So far, proponents of the legislation said they have not yet recruited a congressional sponsor for the proposed measure. “We're still shopping for the guy who is going to carry it,” Mr. Norquist said. Nonetheless, union executives are concerned that the proposal — which has been promoted on conservative websites recently — is part of a well-orchestrated and hitherto underground campaign now surfacing as Republicans settle into leadership positions in the new Congress. “This idea carries major negative financial implications for the states, their creditors and the companies that do business with them,” said Charles Loveless, director of legislation for the American Federation of State, County and Municipal Employees, Washington. “A state going into bankruptcy would send shock waves through the states and could very well undermine our fragile national economic recovery,” he said. “It is incredible to me that proponents of this portray themselves as advocates of state rights when what they're really doing is driving states into the ground,” Mr. Loveless added. “It's clearly in an effort to renege on public employee collective bargaining contracts.” The good news: not all states will file for bankruptcy if this proposal becomes law. Just most. But Mr. Norquist said that, assuming the proposal becomes law, not every state would file for bankruptcy — a right that municipal governments already have under Chapter 9 of the U.S. Bankruptcy Code. “If you don't have this (a state bankruptcy process), you have New York, Illinois and California running off the rails because there's no way to fix their problems ... They've got these contracts with government workers that you can't alter,” Mr. Norquist said. He said restructuring benefit obligations doesn't necessarily mean cutting the amount of money a retiree gets; it could involve freezing a public defined benefit plan and enrolling new employees in a defined contribution plan. Look for some more s

1 Comments in Response to

Comment by Iapetus
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There is an old saying that he who lives by the sword dies by the sword. The same also applies to fiat currency and allowing government to borrow money. Those that live by fiat currency will eventually die by fiat currency which is an historic fact. Allowing government to borrow money....well one would only have to look at the Federal deficit to conclude that a States would probably do the same thing. It is easy to give away money that is not yours and the States have done it well.

Sadly, the various levels of government have extracted so much money from the majority that they are pretty much out of money. The wealthly are loaded, but with rapidly depreciating fiat currency. Winding down the costs of government is manditory but it has never been done, that I know of, in a civilized manner.     

Guys like Ron Paul and Gindrich were fiscal conservative and if the majority would have listened to them, we would not be in the debt we are in today and the States would not be facing the tremedous losses. I'm not sure however that Gindrich is right on this issue but it is one of the ways in which to attach the problem.

Remember, there is no real way out of this mess. The USDollar is dying and we can only attempt to watch it die in the most humane manner. Having attorneys fight over the bankruptcy proceeding scares me, but what are the alternatives.

I fear that the ruling elites are currently keeping us in stagnation attempting to strengthen the USDollar, to the demise of the majority. State Bankruptcies should continue the depreciation of real estate, but the unfunded liabilites and other government debt both State and Federal, will be just two great to overcome. 

Keep an eye on the precious metals as they are the only decent indicator of value.  In my opinion State bankruptcies would force another huge round of business BKs and the losses in revenue would cause a spiraling $USD to it's death. 

What I really expect is a major bank holliday to come within a number of months and a major depreciation of the USD handed to Americans when the banks open.