When it the bankruptcy threats hit larger cities and even states, will the federal government try to step and bailout some of these states and cities? Will conservatively managed states really want to bailout states like California, New York, New Jersey and Illinois? It will still take some time, but America is headed towards being the United States of Greece.
Here's the chart of what has happened to state and local debt, which worrying top level people who understand finance and debt:
Either Bernanke creates a new round of massive inflation that will send prices soaring and which will make the debt easier to pay off, or massive bankruptcies will become a common occurrence.
Let's hope this is the proverbial domino that starts the whole party.
ReplyDeleteI think something like this is a big nudge for other municipalities on the edge to say, "Hey, they did it!"
Maybe it will spur the giant reset we need and even take out some fiefdom's.
It's a long road that needs to be entered: nearly anyone should be free to start any business they want, especially manufacturing goods. If only the government in Washington would go away, we could begin to head down that road. Anyone should be able to manufacture money too. Let's let millions and billions of consumers shape the future, not government.
ReplyDeleteI'll never forget reading about the official (mayor or city manager, I don't remember) in Bell, California. He was paying himself over $800,000/year. I'll bet California's strict environmental laws are a huge gravy train too.
ReplyDelete"Will conservatively managed states really want to bailout states like California, New York, New Jersey and Illinois?" No, they won't want to fund the bailout but yes, they will end up doing it. Why? Because the ruling elites want it that's why. It doesn't matter what taxpayers in the more fiscally prudent red states want. The Demogoguecrat Party politicos will exert tremendous pressure on feckless Republicans in Congress who will cave in and compromise on a bailout "for the good of the country" of course.
ReplyDeleteThere will be the usual Kabuki theater with Greek-like promises of fiscal austerity but we all know that's just a game. Left wing states like Kalifornia will make as many promises as needed to get the bailout loans from Uncle Scam, then like Greece, they will renege on the austerity. Does anyone really think the Feds will let 12 percent of the U.S. economy (Kalifornia) go under? It's all sadly predictable. The political class is only interested in getting through the next election cycle so they always kick the can down the road because it's the easy way out, for now.
The more "fiscally prudent" red states get a larger share of the funds than they pay in, if I recall correctly. I'm not saying CA/NY/etc. are great, but it's best not to look at the red states as being better.
DeletePray tell, where do you get your DATA for such an allegation (about the red states getting a larger share of the funds they pay in)... without a verifiable citation, your post is related to what we in the fly over states used to call 'cow pies'...
DeleteThe Tax Foundation:
Deletetaxfoundation.org/article/federal-taxing-and-spending-benefit-some-states-leave-others-paying-bill-1
Go Eat A Cow PIE, ID10T
Since most of that money is social security and medicare, that only means that red states are superior retirement destinations than blue states.
DeleteThe Nation is already to gop bust.The FED is talking about QE-3.
ReplyDeleteIf they do we will see hyperinflation like Germany had following WW1.Those who are talking about socilism being the problem. They totally ignore the real hog at the trough.That is US Military,
The military destroyed the British Empire and it's destroying USA.
Most are so proud of this huge hog, not realizing it is what will drop the mighty USA on it's ass.
Please don't come back that I must draft dodger,no I spent over 20 years in the US Army with combat in 37th Infantry Korea and wounded