Illinois

[WOTR]

Just wondering what people figure ought to happen with Illinois.  There is a large part of me that believes that if you have offered rich pensions forever with a shrinking tax base and have sold bonds to make up the short fall, you deserve the hurt of bankruptcy.

At the same time, the PIGS were bailed out- so can you really let an entire state face bankruptcy?  "sure we will bail out Greece so that they can continue their stupid fiscal ways allowing people to retire at 50... But suck it up, one of our own (states)".  Also, what happens to the bonds of the other states once creditors no longer feel the "protection" of investing in something "too big to fail"?  (Certainly entire states qualify as TBTF?)

I kind of want to see Trump cut off the gravy train and just let it happen.  What better signal to send to states and politicians that the free ride is over- you had better start watching your spending.  And then I wonder what happens to the pensioners when they are 85 and suddenly there is no more income.

It is interesting.  One cut away from "junk" status (15 billion in unpaid bills, currently, with an unfunded liability of 250 billion in the future.  Ouch!)

[21st Century Man]

Just wondering what people figure ought to happen with Illinois.  There is a large part of me that believes that if you have offered rich pensions forever with a shrinking tax base and have sold bonds to make up the short fall, you deserve the hurt of bankruptcy.

At the same time, the PIGS were bailed out- so can you really let an entire state face bankruptcy?  "sure we will bail out Greece so that they can continue their stupid fiscal ways allowing people to retire at 50... But suck it up, one of our own (states)".  Also, what happens to the bonds of the other states once creditors no longer feel the "protection" of investing in something "too big to fail"?  (Certainly entire states qualify as TBTF?)

I kind of want to see Trump cut off the gravy train and just let it happen.  What better signal to send to states and politicians that the free ride is over- you had better start watching your spending.  And then I wonder what happens to the pensioners when they are 85 and suddenly there is no more income.

It is interesting.  One cut away from "junk" status (15 billion in unpaid bills, currently, with an unfunded liability of 250 billion in the future.  Ouch!)

They made their own bed.  Let them sleep on it.  Same goes for any state that can't make it.  Maybe bail out the pensioners that were not elected to government office but that is all. 

[pate]

Short he cargo, Il'm

'djet..

Just wondering what people figure ought to happen with Illinois.  There is a large part of me that believes that if you have offered rich pensions forever with a shrinking tax base and have sold bonds to make up the short fall, you deserve the hurt of bankruptcy.

At the same time, the PIGS were bailed out- so can you really let an entire state face bankruptcy?  "sure we will bail out Greece so that they can continue their stupid fiscal ways allowing people to retire at 50... But suck it up, one of our own (states)".  Also, what happens to the bonds of the other states once creditors no longer feel the "protection" of investing in something "too big to fail"?  (Certainly entire states qualify as TBTF?)

I kind of want to see Trump cut off the gravy train and just let it happen.  What better signal to send to states and politicians that the free ride is over- you had better start watching your spending.  And then I wonder what happens to the pensioners when they are 85 and suddenly there is no more income.

It is interesting.  One cut away from "junk" status (15 billion in unpaid bills, currently, with an unfunded liability of 250 billion in the future.  Ouch!)

https://www.youtube.com/watch?v=ja0_m-4NAec

[WOTR]

They made their own bed.  Let them sleep on it.  Same goes for any state that can't make it.  Maybe bail out the pensioners that were not elected to government office but that is all.

Mostly, I agree... But that is where it gets sticky.  Bailing out only the unfunded liabilities for the pensioners would be 250 billion... But if the state goes bankrupt, I assume that the "funded" portion would then be split between creditors leaving a much larger sum that would need to be given to them in order to keep the pensioners rolling in the dough.

I think you have to look at the pensions and anything approaching "gold plated" gets cut to the basic pension that you agree to fund.  Those on the bottom end don't see much of a change and there is only one level of pension for all. 

Also, I assume that suddenly the cost to borrow money for damn near every state would suddenly have a sharp increase and would cost the tax payers dearly.

[21st Century Man]

Mostly, I agree... But that is where it gets sticky.  Bailing out only the unfunded liabilities for the pensioners would be 250 billion... But if the state goes bankrupt, I assume that the "funded" portion would then be split between creditors leaving a much larger sum that would need to be given to them in order to keep the pensioners rolling in the dough.

I think you have to look at the pensions and anything approaching "gold plated" gets cut to the basic pension that you agree to fund.  Those on the bottom end don't see much of a change and there is only one level of pension for all. 

Also, I assume that suddenly the cost to borrow money for damn near every state would suddenly have a sharp increase and would cost the tax payers dearly.

That sounds reasonable to me.  Unfortunately, we will probably end up bailing them out.  Then 10 years from now other states like California will go bankrupt and we will have to do it all over again.  Eventually in about hundred years if America doesn't get her shit together, our bonds will be labeled as junk.

[Juan]

Let the state go bankrupt - return it to territory status.  Let any counties that want to join another state do so.

[Jackstar]

Just wondering what people figure ought to happen with Illinois.

https://www.youtube.com/watch?v=AHUw0FmINAc

[WOTR]

...return it to territory status...

Now there is an interesting suggestion that I had not considered...