Better off bankrupt

[clearvision]

Los Angeles Times:

States should have the option of bankruptcy protection to deal with their budget crises.
By Jeb Bush and Newt Gingric

During the 2008 financial crisis, the federal government reacted in a frantic, ad hoc fashion, tapping taxpayers for bailouts galore, running roughshod over the rights of bondholders and catching the American people unaware and unprepared. In contrast, we still have time to prepare for the looming crisis threatening to engulf California, Illinois, New York and other state governments.

The new Congress has the opportunity to prepare a fair, orderly, predictable and lawful approach to help struggling state governments address their financial challenges without resorting to wasteful bailouts. This approach begins with a new chapter in the federal Bankruptcy Code that provides for voluntary bankruptcy by states, a proven option already available to all cities and towns across America.

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Very Interesting Read..... basically saying better to plan now for how to let State declare bankruptcy than for US Government to bail them out.

[ErnstBlofeld]

No, a state cannot declare bankruptcy. The United States Code explicitly lists parties who are authorized to declare bankruptcy. Congress would have to authorize the bankruptcy.Eric Cantor has dismissed the idea of the Congress giving the states the power to declare bankruptcy. The states can only default.However,defaulting is much worse than a bankruptcy.

 

http://www.law.cornell.edu/uscode/uscode11/usc_sec_11_00000109----000-.html

[clearvision]

I think that is Jeb and Newt's point... Congress should get ahead of this and make such a provision before we end up bailing out some of these losing states.

[ErnstBlofeld]

I think that is Jeb and Newt's point... Congress should get ahead of this and make such a provision before we end up bailing out some of these losing states.

 

Sorry, I have not been feeling well and the medication kicked in so I have to read things twice. Its not gonna happen. Bankruptcy did work for NYC in 1975 but you have a Republican majority that will not entertain that for the states.