Gingrich Bill: Allow States to File Bankruptcy

leistb · 01-10-2011, 11:31 AM

Math is math is math. No way out of it.

flourbug · 01-10-2011, 11:51 AM

If you think pulling entitlement programs will result in riots, wait until those pension programs go bye bye.

I can honestly say every single law enforcement office I know, from the alphabet agencies in DC to the local guys, are working BECAUSE of that pension. Take it away and we'll have hundreds of thousands of very angry people with guns and badges. That's just the cops. Now think of the firemen, teachers, sanitation workers, and all others who are checking off the days waiting to retire at age 50 on 2/3 salary and full benefits. It's not going to be pretty - especially if they see politicians keeping their retirement benefits.

More likely bankruptcy will be reorganization, allowing States to cut back on services and salaries in order to keep funding contractually obligated benefits.

Samen · 01-10-2011, 12:31 PM

And he wants to get into the White House.

Kassy · 01-10-2011, 04:47 PM

Quote:

More likely bankruptcy will be reorganization, allowing States to cut back on services and salaries in order to keep funding contractually obligated benefits.

Don't they pay the benefits out of the current salaries? I don't think the system can last because some programs are overly generous if you look at what you pay in vs what you it pays out and the demographics don't help either.

Are the benefits tied to the last wage earned or more weighted?

There will be changes or maybe they just pay out

flourbug · 01-10-2011, 05:12 PM

Kassy, my brother was in law enforcement. He retired after 20 years at 2/3rds salary and health benefits. His monthly check is calculated on the average of the last three years income. He pumped his salary up during those years by working holidays and overtime. Now he is retired and getting almost double what a current full time employee in the same position earns. I know several people who have stacked those 20 year retirement situations - 20 years in the military, then 20 years in law enforcement is very typical and can allow someone to retire before they are 50 with $200-500k per year in income and full health benefits.

The current work force cannot support benefits like that.

Fattail · 01-12-2011, 08:48 PM

My father-in-law has a state pension and he would do what most people will do if the gingrich bill gets close to passing. Pull his cash value out, which would almost immediately bankrupt the state. But he won't have to worry because President Obama won't sign the bill, and it would get filibustered in the senate anyway.

No need to worry, that bill would be much to painful politically. The fed will institute QE 3 and bail out the states and their pensions. The purchasing power of the dollar will go down, but everyone will get to keep their pension.

Ought Six · 01-12-2011, 09:16 PM

.... and then inflation arrives, we cannot roll over the debt anymore, we default, and the entire world economy blows up. Pensions are then irrelevant.

Ought Six · 01-20-2011, 11:57 PM

http://www.nytimes.com/2011/01/21/bu..._r=1&src=busln

leistb · 01-21-2011, 10:41 AM

Looking for ways for states to file bankruptcy is gathering steam behind the scenes.

Potemkin · 01-21-2011, 10:51 AM

Quote:

Originally Posted by flourbug

Kassy, my brother was in law enforcement. He retired after 20 years at 2/3rds salary and health benefits. His monthly check is calculated on the average of the last three years income. He pumped his salary up during those years by working holidays and overtime. Now he is retired and getting almost double what a current full time employee in the same position earns.

It also happens here. Bunch of cr@p. I even think their pay for "extra duty" counts toward the "salary" used to compute the pension pay.

However, my state has created a fund where cities pay the contributions monthly or quarterly for the pensions of law enforcement, firefighters or other city employees..

After that they are off the hook for it.

The smaller cities are doing it. The larger ones are being held hostage by the unions to keep it in house so they can control what happens politically.,

Ought Six · 01-21-2011, 04:13 PM

I was flipping through the news channels this morning as usual, and Judge Andrew Napolitano was commenting on this on FBC. He said there is a federal constitutional requirement that states honor all contracts and pay all debts, so any law passed by Congress to allow state bankruptcies would be struck down as unconstitutional. Also, many states have the same provision in their state constitutions. Furthermore, the sentiment in the House is strongly against bailing out the states. So Congress bailing out the states is a non-issue. Napolitano said what is going to happen is that the Fed will bail out the states by buying up their bonds. I believe that he is correct.