State Bankruptcies Will Change the Face of Power

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Facing huge budget difficulties, New Jersey Gov. Chris Christie has been showing other states how to survive — namely, by taking on the government-employee unions.

Christie’s battles with the teachers unions over the past year have produced countless YouTube hits. And last month, he got a law passed to limit wage hikes from labor arbitrations between the state and public-employee unions to an average 2 percent annual increase.

As New Jersey, New York, California and Illinois — the four with the highest insurance premiums on their bonds — face life without a compliant Congress to approve their pleas for more cash, they’ll increasingly have to follow Christie’s example and rein in their unions.

As Margaret Thatcher famously said, the problem with socialism is that sooner or later “you run out of other people’s money.”

When the states come calling, the House must say, “No.” What’s more, it’s time to amend the federal bankruptcy laws to create a procedure for state bankruptcies — allowing states to abrogate their municipal-union contracts from the school-board level on up.

States, in bankruptcy court, should be able to reorganize their finances so as to put themselves back on a stable footing.

Initially, municipal-bond buyers will protest the lack of federal assistance and may even deny states and localities access to the bond market at any interest rate. But once the states reorganize, they should be able to proceed normally — just as New York City did after its financial meltdown in the ’70s.

Such reorganizations needn’t require any ongoing federal involvement.

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  • okrahead

    No need for bankruptcy, Jerry Brown has the cure for California's economic problems, he has issued the following statement…

    From the desk of Governor Moonbeam:

    Dear Citizens of California,

    As you are aware, we are suffering a serious crisis in both our budget and our energy supply. Fortunately, after serious deliberation, I have devised a plan which will solve both of these problems.

    In order to solve our energy crisis, my advisers have determined that we will need to install 21,150,000 square miles of solar panels. Obviously it will be difficult to find enough room for these panels, but fear not, I have a plan for that as well. My advisers have assured me that it will be possible to fire solar panels into a low gyosyncronous orbit directly above the state of California, from which position they will employ the energy projection theories of Nikolas Tesla to beam electricity directly to our homes and businesses. I have been assured that this plan is fool proof and environmentally friendly. Not only that, but if we can place these millions of miles of solar panels directly over the desert they will provide some handy shade in the summertime heat!

    There is, of course, the problem of financing the space vehicles which will carry these solar panels into orbit. Fortunately, I have a plan for that as well. We will simply refuse to appeal the decision overturning our ridiculous ban on gay marriage. Once gay marriage is fully legal here in California, we can charge $1,000.00 per marriage license to out of state couples. This will bring in tremendous revenue, not to mention a boom for the tourist industry as those couples choose to honeymoon here as well. Nothing can go wrong…. Read the rest here…. http://beautifulletters-bls.blogspot.com/2010/11/

  • Wesley69

    Unless union contracts are brought under control, states WILL go bankrupt. States could then renegotiate more realistic contracts. We here in Florida receive 48% of the average of our five highest earning years. In order to start collecting a full pension, you need to have reached 30 years of service. Salaries in the North are much higher than here in the South, but so is the cost of living.

    The key is breaking the Closed Shop. Most Northern states are this. People have no choice but to join a union. If the Closed Shop was outlawed, the unions would lose power both in finances and membership.

  • cgerber

    Pritchard Alabama 170 employees lost all their city guanteed penision, the citiy is bankrupt more US cities and states will follow soon…. there is no more monies unless you can print NOBAMA bucks. Ask yourself this simple question ,the municpalities and states have reduced billions of dollars of services to the streets, yet taxes have gone up everywhere. The government parasites who distribute these monies are still working. Why are they not laid of, after all thousands are not working distributing taxpayers funds. How long will this last? …..look at Greece, England, Ireland, Italy……..

  • kafir4life

    After having been in three unions, all not by my choice completely (of course I could have either found another job…..which I did, or replace my tires weekly). Currently I go out of my way to avoid buying union goods and services. It's not 100% possible, but it is getting easier. I have nothing against the bulk of the rank and file, just the entire thugishness of the unions themsleves. Besides, I don't want my hard earned money to find its way into democratic tip jars.