Congress to Consider State Bankruptcy
(Reuters) - Legislation that would allow U.S. states to file for bankruptcy will likely be introduced in Congress within the next month, Newt Gingrich, the former speaker of the House of Representatives and a powerful Republican party figure, told Reuters on Friday.
Is Newt Gingrich nuts or right on the money? Should states like California, New York, Illinois, and others be allowed to belly up to the bankruptcy court with tens of billions of debt?
Will people that retired from or work for these states all lose their pensions because the state never fully funded them? Will this or will it not open the flood gates of litigation for other states to walk away from bigger than life debt like the Big Dig in Massachusetts? What about the potential loss of reliable state public works contractors for future projects? And what about the union agreements of existing state workers, do those all get trashed?
One thing that is certain, none of the states that could benefit from this kind of legislation are interested in it because the downward side of the bankruptcy would bankrupt the political leaders that choose to use it. If you honestly think about it from a politician’s point of view, democrat or republican, would you want your name and political party synonymous with “State of (insert state name here) Bankrupt” as a Governor? Would your state political party leaders even let you as their Governor consider filing bankruptcy on behalf of your state? No, and HELL NO!
The way that this “State’s Bankruptcy” legislation will go down in the congress is that the Republican’s will pass it in the house and the Democrat’s will kill it in the senate. Then they will each politically spin it so they look like the ones defending the American peoples pocketbook. In the meantime the states with a serious accounting problem will still be in the toilet. Why don’t they just forget about all that wasted time debating it and figure out a realistic way to get the troubled states back on their feet? I’ve said it right here once before that politicians don’t really care about taking care of the actual problem, they just care about blaming the other side for it.
Last thought, Newt, you have been out of public service since 1999, just shut the hell up.