Posted by Bill Leonard at 12:00 am on Mar 03, 2011 Comments Off on Bankruptcy, Don’t Go There
Bankruptcy is not the pot of gold at the end of the
rainbow. But to read some of the advocacy in behalf of
allowing states to go bankrupt you might think so. Want to
break a labor contract why then go bankrupt. Want to reduce
pension benefits why then go bankrupt.
Bankruptcy is used by families and businesses when either their
expenses exceed their incomes or more likely when their debts
exceed their assets. As big as California’s debt is there are
a lot more assets to secure it. Regarding expenses, most all
of the California budget can be adjusted downward if there is
political willpower to do so. California does not qualify for
bankruptcy.
The real problem is political willpower. As long as
solutions exist short of bankruptcy whether it is cutting expenses
or even raising taxes no bankruptcy judge is going to enter
that thicket.
For those who honor the federal Constitution there is a big
reason that states do not file for bankruptcy. They are
sovereign entities who cannot cede their sovereignty to the Federal
government. It is disappointing to hear so many conservatives
ignoring the… Read More