What should happen if a state goes bankrupt?

Who holds all this wealth you are crying about? It is people, people with faces, family friends and loved ones just like you. Just because they are wealthy does not make them inhuman or take away there individual rights that you share. They pay taxes just as you do and noen of them pay more than is required just as you do. The money they have belongs to them and I or anyone else do not have a right to take it from them. Even though I would love to have some of it but I know it does not belong to me. It is time that people start taking responsibility for their own lives and not try to take from others to cover their own short falls.

 

this is kinda happening to PR after the natural disaster, if no one helps them out, they move, many in PR are moving to other states

 

I disagree with removing the peoples voice from Congress, the federal government is run by the people for the people

 

Puerto Rico is not a state.

 

yep, republican can move to a dem state and dems can move to a republican state, thus changing the political dynamics of states, works for me

many from PR have moved to swing states, be interesting to see how that turns out

 

Americans that lived in PR did not have the right to vote, but when they moved to swing states, they now do have the right to vote

 

The US has been borrowing with the equity of California for decades (California contributes twice the percentage of GDP of any other state). Between California and Illinois, you have nearly 20% of the nation's GDP ... if California goes - so does the credit of the US. Think before you post.

 

It is still not a state, we only have 50 states and PR is not one of them.

 

States credit ratings have nothing to do with the US rating. The state of California doesn't give **** to the federal government. It is the massive economy in California that does it not the government. The problem is that the California government spent themselves into oblivion. Bad government should not be rewarded with a bailout. California cannot declare bankruptcy the only thing that will happen is what is currently happening in Illinois, they simply won't be able to pay anyone and literally send out IOUs. The citizens of California not only elected the Democrats into position of power but they voted in a super majority of Democrats. The people of California will wake up to fine that all of their state employees are no longer paid and because its run by Democrats they will increase taxes yet again........cause you know that always works. LOL

If you bailout CA and IL then every single state that doesn't have a balanced budget will go bonkers on spending. After all if your state had to pay for California why not return the favor and run up massive debt and have California pay for your bailout the next year.

Moronic voters deserve what they get. The sad thing is that ****ing idiotic Californians are moving to Texas and trying to ruin that state as well. Can't those ****ers just stay in their own state instead of spreading their disease to everyone else?

 

The same goes for Mexicans, "Can't those ****ers just stay in their own state instead of spreading their disease to everyone else"?

 

I grew up next to a Mexican neighborhood. I would take those people any day over the typical clueless California voter. The idiots voted for a train when their state was flat broke and were shocked when it cost more than the proponents said it would. How ****ing stupid can you possibly be?

 

No arguments about Californians. I have no problem with Mexicans but I do have a problem with illegals and the chickens in my Mexican neighbors back yard.

 

No bailouts!

 

The entity that goes bankrupt (state, municipality, etc.) should follow the prescribed steps appropriate to the kind of bankruptcy being declared.

The Federal Government should not (NOT) be involved at all unless public safety, law, and order are threatened. At that point, it would be correct for Federal armed force to be used to restore and/or maintain civil order.

Thus, if the State of California, or the City of Chicago, goes bankrupt it is not (NOT) Colorado's problem... etc.

 

On what constitutional basis could the Feds take over a state?

The only states that would go bankrupt are liberal states like California. Knowing them they'd take all the Fed money they could lay their hands on and then bitch that the Feds had no right to interfere. The sick thing is that they would be right. So the best thing would just be to let them swing from their own rope.

 

Notwithstanding a pension deficit of more than $128 Billion, California had a budget surplus of $6.1 Billion and is projected to have budget surpluses in the Future, so it's not likely that California will go bankrupt in the near Future.

Illinois is more likely to go bankrupt than California.

The fiscal reality is that States raise money through taxation, and by issuing bonds. As a State becomes fiscally unsound, its bond-ratings are down-graded, effectively barring it from issuing future bonds. That would usually result in a State raising taxes, while simultaneously reducing services. The "Contracts Clause" of the Constitution prohibits a State from reneging on contracts, but once such contracts were completed, they probably wouldn't be renewed, unless the contracts were vital to the operation of the State.

A State's fiscal problems have minimal impact on a State's GDP.

States are barred from bankruptcy laws, but municipalities may file bankruptcy under Chapter 9.

 

That's funny excluding the huge pension debt and then claiming California has a surplus. That was a joke, right? That's like saying if you ignore social security, medicare, Medicaid then the US federal govt is in great shape.

People and businesses are leaving California so its tax base is shrinking. It has a more than $400 billion pension and retiree healthcare liability. California is a fiscal disaster.

In all the state fiscal rankings I searched, both California and Illinois are in the bottom 10 although Illinois is usually in the bottom 3. So if you want to put lipstick on the pig you can say California will not be first to drown.

 

I see what you're saying and agree with you in spirit entirely. BUT, if Mircea is correct in stating that neither California nor any other state in the U. S. can 'declare bankruptcy', then what would any such state do when 'the well runs dry'...? To my knowledge (limited as it is concerning this topic), nothing in the Constitution addresses this exactly....

 

The Constitution defines explicit powers allocated to the federal govt. If the power to bail out states is not explicitly provided to the feds (as you have observed), then the feds cannot bail out states.

A state is a legal entity with property and assets, and which can incur debt obligations. If a state cannot pay its obligations, it may not be able to declare bankruptcy but it can still be sued and its property/assets taken to pay the debt.

 

Good. If individual states so poorly manage their finances that they aren't economically viable anymore, I'm glad that the Federal Government cannot 'bail them out'.

But, by the same token, I've been upset for years that the Federal Government so often sticks the individual states with "unfunded mandates". The über-bureaucrats in Washington D. C. have some big 'brain-fart', and then pass the costs on to the individual states. Why is a thing like that permitted -- especially given that the states will be punished with no less than warfare if they try to leave a tyrannical government like that.

. "You Southerners aren't going anywhere!"

 

OK, I've read here that it is not possible for a state to declare bankrupcy. Fine. Then just let the state sit there and stew in their own crap and not involve the federal government or any other state. That means they will have to deal with their own welfare populations and they won't be able to offer millions of dollars in sweetheart deals to corporations. People would leave there in huge numbers and then the state would have to start all over again. The smart thing would be for them to throw out all the welfare programs and run a balanced budget.

 

The stupidness will be even greater when an earthquake takes the train out. Why would anybody invest money in California? They are overdue for really big earthquakes.

 

Why would anyone invest in any "progressive" state? "progressive" = fiscally and morally irresponsible

 

Spot on correct! And I never tire of pointing out that it was a big "Progressive" movement headed by Woodrow Wilson 103 years ago that saddled us with a central bank called the Federal Reserve System.

We've had one boom-and-bust cycle of depressions, recessions, and "irrational exuberance" ever since. This madness is now fully ingrained in the mentalities of both the federal government and that of the states. And the more liberal, "progressive" and irresponsible those states are, the greater the likelihood that complete financial disruption and bankruptcy will follow.

 

No sovereign state of the U. S. can declare bankruptcy. Maybe somebody needs to start a new poll? The cities inside a state can declare bankruptcy and if the city is important or big enough like Chicago for instance, it could cause a lot of really big problems, but not bankruptcy for the whole state of Illinois for example.