State Bankruptcies Will Change the Face of Power


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The procedure would let the states help themselves, giving governors and legislatures a third way out of their financial mess. Raise taxes, cut spending or … alter union contracts. Each state would face the choice of whether to wallow in overspending or take steps to correct it.

Initially, Democrats will oppose the idea of state bankruptcies. But when House Republicans make clear that no more aid will be forthcoming and that the stimulus spigot is turned off, at least some Democrats will realize this is their best option.

Then, fiscal necessity will have achieved what so many of us want — a return of true local government.

No more will schools be run for the teachers and by the teachers — nor will such unions as the Service Employees International Union and the American Federation of State, County and Municipal Employees dominate state legislatures. School choice, charter schools and even voucher programs will have a chance to flourish.

Some fear the U.S. Constitution prevents federal law from extending Chapter 9 to permit state bankruptcies because it would violate state sovereignty. Yet Chapter 9 is voluntary, so states would remain sovereign — with merely the option of subjecting themselves to Chapter 9 constraints.

Giving insolvent states the power to break their union contracts would alter dramatically the balance of political power all across the nation. No longer would municipal unions have the financial ability to underwrite the Democratic Party. Gone from our politics would be $200 million that the American Federation of Teachers, the National Education Association, SEIU and AFSCME together spent on political action in the last election cycle.

Government would be returned to the people.

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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.