Should Cities and States Be Allowed (Required) To Go Bankrupt?

Townhall.com ^ | April 26, 2020 | Hank Adler

[EBH]

Yes

[Cboldt]

Cities and municipalities can, there is US Code and regulation for that.

[Principled]

Of course... If there were no consequence for improper/excessive spending, what would prevent it?

There MUST be a consequence for entities who spent unwisely.... it’s the only way to discourage such behavior

[allendale]

Bankruptcy and reorganization is the only valid long term solution for these high spending states and cities. Even in the best of times their spending was not sustainable.

[Da Coyote]

Not only yes, but any politician that even thinks about bailing out places like Illinois with it’s universe-class corruption should fear for their well being.

[P.O.E.]

Of course, the government will decide who gets paid & who doesn’t.

My guess - money will go to the banks, then the social welfare bureacracies and their clients. Police and fire departments hardest hit.

There’s a track record.

[Kaslin]

Absolutely

[DoodleDawg]

To the extent that a city or state spent additional funds to battle the coronavirus, that should be a federal issue.

Does that include the loss in revenue expected from the Covid-19 economic crash? Because I believe that's what the states, counties, and cities are looking for help with.

[Wildbill22]

Absolutely. Why do other states have to pay for the socialist mistakes of California or New York?
Time for them to make the cuts to live within their means.

[ealgeone]

Watch what happens IF Trump loses in November and the gop-e loses the Sinate.

[Roklok]

You want revenue. Open up your damn state.

[Beagle8U]

Cities can, States not so much.

[FreedomPoster]

>> Police and fire departments hardest hit.

And the schools. Teachers, not administrators, of course.

[CodeToad]

Yes. Who invested in these corporations? They are each incorporated. Just because they are a government doesn’t mean they cannot go bankrupt.

[MtnClimber]

Yes. And government employee assets and pensions should be seized to repay the constituents they betrayed.

[PapaBear3625]

States cannot declare bankruptcy.

Then again, states have sovereign immunity, which may limit what creditors can do in case of default.

[voicereason]

Bankruptcy and reorganization is the only valid long term solution for these high spending states and cities. Even in the best of times their spending was not sustainable.

Totally agree. As part of the restructuring, there Also needs to be adjustments to wage scales, pension and retirement benefits, ending of unnecessary services, etc.

[PeterPrinciple]

States cannot declare bankruptcy.

---

There are rules of bankruptcy for individuals and businesses.

Cities and counties have followed some of these rules.

So technically you might be right. Doesn’t mean they wont go broke, just that there are no written rules.

But doesn’t matter, our government just makes them up as they go.....................

[Pearls Before Swine]

The federal government, which is all the citizens, cannot be asked to bear the burden of individual city and state financial malpractice. Printing money impacts those who were not a party to that financial malpractice.

Bailing out state and city pension funds would amount to taxation without representation.