[rdcbn]

The union compensation packages are unsustainable. Unions have two options.

The first is to renegotiate a compensation package that is sustainable.

The second is to have the states go into bankruptcy, lose most of the benefits as unsecured creditors and have a revised compensation package imposed upon item at time of economic crisis where they will receive bad publicity and little sympathy.

They will choose the second option

[goldstategop]

The unions can either agree to more realistic retirement benefits or see their members get nothing.

Given that choice, they will choose option 1.

[nathanbedford]

I think you are right, the unions will choose to drive the states into bankruptcy because that way the leadership of the unions will not have to explain why they traded away their members' pensions they can simply blame it on the Republicans and the courts.

The Republicans, for their part, face a political problem: if they oppose bailing out the states they will be accused of heartlessness again and could be held responsible for the fallout damage which cannot now be calculated. It is impossible to say how bad the ripple effect would be from the implosion of an economy the size of California's.

Therefore, Republicans must define the equation as a choice between those states which have been responsible and those states which have been irresponsible and ask why responsible states should be taxed for irresponsible states which pandered to public-interest unions to win elections for Democrats. Even more effective, Republicans must structure the argument as a choice between public interest union pensions and Social Security.