Republicans Want Cash-Strapped States To Declare Bankruptcy?

Speaking of the “Land of Lincoln,” I came across a piece in the Wall Street Journal yesterday in which Illinois Treasurer Dan Rutherford talked about the option of bankruptcy protection for cash-strapped states like Illinois. Michael Corkery wrote:

Illinois Treasurer Dan Rutherford has a solution to fiscal problems facing state and local governments.

“Someone has to go out and have the testosterone and deal with the problems, particularly with the public employee unions,” the state’s Republican treasurer said in a forum this week at Cardozo Law School of Yeshiva University in New York.

Testosterone, said Mr. Rutherford, is better than the alternative: allowing states to seek bankruptcy protection so a judge can sort out fiscal problem such as pensions.

According to Rutherford, Republicans in Congress are pushing the idea of bankruptcy protection for states. From the article:

While saying that, “I happen to be treasurer of one of the most bankrupt states in all of America,” Mr. Rutherford said he was breaking with congressional Republicans who have supported the state bankruptcy idea.

“I think what is driving this boat … that we have some Republican juice in D.C. and they don’t want to have … to bail this whole thing out.”

ABC News’ Mary K. Bruce reported back on February 27 that state governors are not big fans of the idea. She wrote in The Note blog:

Governors today slammed talk of federal action to allow states to declare bankruptcy and said the idea would ultimately do more harm than good.

“Suggestions have been brought forward and some speculation that states are teetering on the brink of bankruptcy. I’m here to say I believe that’s a dangerous development,” Utah Gov. Gary Herbert said at a panel on the state of public finance at the National Governors Association winter meeting. “It has risks to our municipal markets, to those who invest in our states wondering about the economic viability of our states. This is coming from incomplete and in many times inaccurate information.”

Herbert, who chairs the NGA’s Economic Development and Commerce Committee, went on to say that Congressional talk about a state bankruptcy option “brings uncertainty to the marketplace and causes a potential increase in interest rates. It rattles investors and will raise the cost of state government and create more volatility in the financial markets.”

Congress has held several hearings on the possibility of allowing states to declare bankruptcy, which, proponents argue, would help cash-strapped states get back on track by relieving them of debt. Influential Republicans, including Newt Gingrich and Jeb Bush, have suggested bankruptcy would give states the option to reorganize their finances and free themselves from union obligations.

“In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc,” Bush and Gingrich wrote in a Los Angeles Times op-ed last month. “The lucrative pay and benefits packages that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health.”

Governors at the NGA conference today strongly disagreed.

Stay tuned.

Sources:

Corkery, Michael. “Ill. Treasurer: ‘Testosterone’ Needed to Solve States’ Fiscal Woes.” Wall Street Journal. 24 Mar. 2011. (http://online.wsj.com/article/SB10001424052748703784004576220474201416538.html). 25 Mar. 2011.

Bruce, Mary K. “Governors Reject State Bankruptcy Option.” ABC News (The Note blog). 27 Feb. 2011. (http://blogs.abcnews.com/thenote/2011/02/governors-reject-state-bankruptcy-option.html). 25 Mar. 2011.

Share

Tags: , , , , , , , ,

Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

PLEASE RATE this blog HERE,
and PLEASE VOTE for the blog below:



Thank you very, very much!
Advertising Disclosure here. Ad captions last reviewed/updated 4/18/17.
ANY CHARACTER HERE
Freeze Dried Food SPRING ADDITIONAL 15% DISCOUNT (promo code- home page); Free Gift w/ Purchase; Free Shipping (domestic orders). Review coming soon.
ANY CHARACTER HERE
Family-Owned & Operated in Chicago Suburbs! SAVE 10% OFF ALL ITEMS (promo code- home page); Free Shipping (U.S. orders) & Returns. Review coming soon.
ANY CHARACTER HERE
Buy Gold And Silver Coins BACK-DATED SILVER & GOLD EAGLE SALE!; Secondary Market Silver Coin/Bar Sale (1 oz. coins, 10 oz., & 100 oz. bars); 90% Silver U.S. Dimes & Quarters Sale; U.S./World Gold Bullion Coins/Bars also on sale; Free Shipping on U.S. orders $99 and up (only $5.95 below $99!). BGASC reviewed HERE.
ANY CHARACTER HERE
BullionVault World's Largest Online Investment Gold Service taking care of $2 billion for over 65,000 users from 175 countries. BullionVault.com reviewed HERE.
ANY CHARACTER HERE
SAVE 20% OFF ALL CASE PACKS!; BUY 3-MONTH SUPPLY GET BREAKFAST KIT FREE!; Big Savings on "Deal Of The Day" page; Free Shipping on orders over $79. MyPatriotSupply.com reviewed HERE.
ANY CHARACTER HERE
bullet proof vestsWorld's First Bulletproof Baseball Cap only $129; Bulletproof Ceramic Plate (NIJ Level III Stand-Alone) only $169; Bulletproof Backpack/Messenger Bag Panel only $99. BulletSafe reviewed HERE.
ANY CHARACTER HERE
Survival Titles Save 20% SAVE 35% ON SURVIVAL TITLES! (promo code- home page); Discontinued Title Sale- Savings up to 75% Off Original Price. Paladin Press reviewed HERE.
ANY CHARACTER HERE
This project dedicated to St. Jude
Patron Saint of Desperate Situations



happyToSurvive

Categories

 

Archives

RSS Chris Hill’s Other Blog: Offshore Safe Deposit Boxes

  • Degussa Singapore Launches YouTube Channel
    It’s been some time since I last blogged about the first Asian branch of Degussa, a leading international player in the precious metals world. Degussa Singapore opened its doors at 22 Orchard Road in October 2015 and operates a safe deposit box service in addition to selling bullion bars, coins, and precious gifts. Yesterday I […]
  • Nomad Capitalist’s 5 Best Countries For Offshore Gold Storage
    Research related to Monday’s post about precious metals storage in Singapore led me to a piece published last fall by Andrew Henderson over on the Nomad Capitalist website. I’ve mentioned Andrew and his company before on the blog, but for those readers not familiar with them, Henderson is the founder and managing partner of Hong […]
  • Singapore’s ‘Strong’ Precious Metals Storage Infrastructure Anchors Trading Hub Push
    It’s no secret that Singapore has become a global leader in the storage and safekeeping of private wealth. In fact, the last mention of the Southeast Asian city-state on this blog concerned a December 12, 2016, article on the The Business Times (Singapore) website which noted privately-owned precious metals from around the world are finding […]
  • List Of Offshore Private Vaults Updated
    The list of private, non-bank vaults outside the United States (offering safe deposit boxes/lockers at a minimum) located on this blog’s sister site- Offshore Private Vaults- was recently updated. Safe deposit facilities now open for business have been added under the following countries: -Hong Kong (Royal England Safe Deposit Box Ltd.) -Thailand (Magna Carta Law […]
  • Next Degussa Numis Day To Take Place May 4, 5
    Degussa, a leading international player in the precious metals world which also offers safe deposit boxes (for customers) at branches in Germany, Singapore, Spain, and Switzerland, has just posted information about their next Numis Day (first blogged about here) at their Geneva and Zurich showrooms. From their website: The Next Numis Day We appreciate and […]