Community | January 21, 2011 | 17 comments

States look to bankruptcy to escape debt, pension obligations

source: http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=4&src=busln

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Dagum
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.



Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Continued at:
http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=4&sr...
  1. groups:
    Community,   Monetary Matters
  2. tags:
    Bankruptcy,  States,  Pensions
  3.     
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17 comments // States look to bankruptcy to escape debt, pension obligations

  • good_stuff
    • 0
      good_stuff  

    • Interesting that a state can declare bankruptcy. I think it will definately make people think twice before going into public service careers, which can have good and bad aspects.

      I knew a guy who worked for our state DOT. He said that employees were paid overtime (time and a half) for anything over an 8 hr day (insteead fo 40 hour week). He said that nearly everybody works (4)-12hr days in order to maximize their take home pay. No wonder those road projects cost so damn much and take so long.

    • 1 year ago
  • Dagum
  • 63pmacp
    • 0
      63pmacp  

    • These are the big fish
      Who always try to keep down the small fish
      I'm just a small fish.

      They live the life
      Of false pretense each and every day

    • 1 year ago
  • toyotabedzrock
  • figgdimension
  • figgdimension
    • +2
      figgdimension  

    • The disregard for pensions of public workers who did their service by new public workers in the state houses of this country is the epitome of disregard for workers and the Law that protects them from this kind of plutocracy

    • 1 year ago
  • MrMxyzptlk
  • toyotabedzrock
    • 0
      toyotabedzrock  
    • MrMxyzptlk:

      They give up part of their pay to put toward their pension.

      You idea is to circumvent capitalism. Since most state governments run as capitalist entities, as evidenced by the fact they use money and have budgets.

    • 1 year ago
  • wally60
    • 0
      wally60  
    • figgdimension:

      why should i pay for their retirement my tax money should go to my retirement.
      these people only put enough money in to last 5 or 6 years then we the tax payers
      pay the rest,sorry but the system is broke!

    • 1 year ago
  • wally60
    • 0
      wally60  
    • toyotabedzrock:

      its just not enough of their pay.i work for a collage they take 7% but over time its not
      enough to pay retirement.run the numbers it doesnt take long to figure your broke.
      my brother in law retired 25 years gets 80% of his salery gets 3% raise a year.you have to be stupid to think we can support this oh and he is 52.

    • 1 year ago
  • MrMxyzptlk
  • Saladin
  • Sparky2U
    • 0
      Sparky2U  
    • Saladin:

      Here in Austin Texas municipal workers who retire after 23 years regardless of age, go right back to work for the same departments they left as hourly employee's. Double dipping is a real issue these days.

    • 1 year ago
  • MrMxyzptlk
  • Saladin
    • 0
      Saladin  
    • MrMxyzptlk:

      That would be before taxes jackass. And in California, the price of living is much higher.

      If you don't mind living in a shithole, barely getting by and never doing anything, good for you. But I'd like to think people that do essential, difficult jobs get paid a middle-class wage.

      Not only does that attract better talent, it ups their standard of living and is actually good for the economy.

      And if you don't make 60,000 a year or even anything close to that, chances are good that you pay so little to taxes that I could probably mail you a 5 spot and you'd get a refund for that year.

      Seriously, what do you do that makes you entitled to shit on firefighter salaries? Given that you scoffed at a 60,000 wage, I'd wager something not particularly worthy of that level of sneer.

    • 1 year ago
  • ThatCrazyLibertarian
  • toyotabedzrock
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