Gingrich Pushing Bill to Allow State Bankruptcy

[ZECH]

There are different kinds of bankrupticies......some you still pay bills, and some you pay only cetain ones so it depends.

 

[Dark Geared God]

i want to understand this correctly......so if a state is awarded bankruptcy, then the businesses it owes money to will never see it and go bankrupt as well if they haven't already?......

i still say just give california back to mexico and build a super super huge border fence and national guard presence in full effect......soon cali will fall off into the ocean floor anyway, so it's not like we'd be losing much!!!

No they will get pennys on the dollar thats chapter 11 a judge will step in and audit the debt and pay accordingly
Oh it sucks if u they owe u money

 

[Big Smoothy]

i want to understand this correctly......so if a state is awarded bankruptcy, then the businesses it owes money to will never see it and go bankrupt as well if they haven't already?......

I believe the cities and states would be under Chapter 9.

Regardless, the answer to your question is "yes."

The cities and states are not individuals. The bankruptcy changes for individual passed by Congress in '05 mandates that people pay most of their debts back even if filing for bankruptcy.

The city and state bankruptcy is a different issue.

And remember, when there is $0. Payments won't be made, regardless.

 

[GearsMcGilf]

I would imagine that the idea is to let states and munis know that they can not expect to spend irresponsibly and expect to be rescued by the Federal govt, as the giant banks and insurance companies were. That was bad precedent and they obviously can't afford to start bailing out state govts such as California.

 

[Nightowl]

yeah, because his stupid ass couldn't come up with an answer.

the tired MF'er

 

[Big Smoothy]

I would imagine that the idea is to let states and munis know that they can not expect to spend irresponsibly and expect to be rescued by the Federal govt, as the giant banks and insurance companies were. That was bad precedent and they obviously can't afford to start bailing out state govts such as California.

You are comparing two things. (Related yes, but 2 different things.)

1. The bailout of the financial monsters such as AIG, Goldman Sach, JP Morgan and others. Lehman Bros. was allowed to go under. Bear Sterns went down the drain, and was acquired into another bank).

Corrupt, fear mongering, to support the bail out, but fears of an entire meltdown, as these institutions are interlinked with many things in the US. But we know that this bailout was friends and insiders bailing out friends and insiders.

2a. Bailing out the municipalities (by the states).

The states don't have the money. They have massive budget gaps (translation: they are broke.) It's cut-back time.

2b. The states themselves could ask the (private bank of the) Federal Reserve via by asking the Fed Gov to another digital bailout of money that is created on a computer, but that would be a band-aid on a bullet wound.

The Fed has already handed out between 13 and 20 Trillion dollars to US companies like Harley Davidson, McDonalds, and banks around the world from Canada to South Korea.

The Federal Reserve and/or Federal government would just post-pone state insolvency.

Califrornia, Illinois, New Jersey, and other states have not even hit bottom yet.

 

[GearsMcGilf]

Yeah, that is sickening that our tax $ went to companies that we didn't even know about, foreign banks as well. The Fed Reserve acts like an unelected govt of its own. It's a fucked up system, no doubt. That being said, it is scary to think about what might have happened if, for instance, AIG had been allowed to go under. We were told that the sky would fall, that Europe would crash, and banks all over the world would fail because AIG insured so many bank loan portfolios. Then again, Europe is hurting worse than we are, and last I heard, banks all over the country have been failing despite the bailout. All we really know is that we're $14 trillion in debt now that it's all been done.

 

[Big Smoothy]

Yeah, that is sickening that our tax $ went to companies that we didn't even know about, foreign banks as well. The Fed Reserve acts like an unelected govt of its own. It's a fucked up system, no doubt. That being said, it is scary to think about what might have happened if, for instance, AIG had been allowed to go under. We were told that the sky would fall, that Europe would crash, and banks all over the world would fail because AIG insured so many bank loan portfolios. Then again, Europe is hurting worse than we are, and last I heard, banks all over the country have been failing despite the bailout. All we really know is that we're $14 trillion in debt now that it's all been done.

I agree with your points, Gears.

Honestly,

The US has not even hit the bottom. Where the bottom is, I don't know.

Remember folks, the US housing fiasco has not peaked yet.

US Housing problem will peak this year, in 2011 (if you're counting the number of foreclosures, and the Alt-A resets that are happening now).

Cities and states are the path to insolvency.

High unemployment.

I'm just repeating what we've discussed in this thread and some others, but it's worth repeating:

Things will get worse, before they get better.

And for getting better, I am looking at at least 5 years. And when it gets "better" it will not be like the past.