WTF!?! States Declaring Bankruptcy Can Invalidate State Constitutional Terms?

[AZRedhawk44]

http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?src=busln

DANGER, WILL ROBINSON!

From the article:

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions

I won't live or work in a State that declares bankruptcy.

Under the above-quoted premise, if something merely costs the State too much money (and is justified to a Judge as such), the Constitutional provision that MANDATES it MUST BE DONE is invalidated?!?

I hate welfare and State health care.  But if the idgits in a State put it in their Constitution, that's sacrosanct until the PEOPLE OF THAT STATE remove it.

Anything else is judicial activism of the worst sort.

[Monkeyleg]

It's probably the only way for states like CA to survive. Not saying any of it is right, but it's probably going to go that way.

Why do you think Obama intervened in the Chrysler and GM bankruptcies, and extorted the bond holders to take dimes on the dollar? He saved the union's pensions and benefits by screwing the people who were legally first in line to be paid, the bond holders.

[Headless Thompson Gunner]

I'd like to see an example of a state constitution with these sorts of obligations in it.  I've seen state constitutions guarantee public education, but never pensions or the like.

Ultimately, whether it's in the constitution or not, if there's no money there, it can't be paid.  Politicians can make all of the promises they want, even put those promises in a constitution, but they can't do anything to create the resources needed to fulfill those promises.  I'm not sure what the solution is, here.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care.

Effing New York Times.  HEALTH CARE IS NOT AN ESSENTIAL PUBLIC SERVICE OF THE STATE!!

[French G.]

It's probably the only way for states like CA to survive. Not saying any of it is right, but it's probably going to go that way.

Why do you think Obama intervened in the Chrysler and GM bankruptcies, and extorted the bond holders to take dimes on the dollar? He saved the union's pensions and benefits by screwing the people who were legally first in line to be paid, the bond holders.

I hope that becomes his presidential legacy.

[sumpnz]

Effing New York Times.  HEALTH CARE IS NOT AN ESSENTIAL PUBLIC SERVICE OF THE STATE!!

Neither is education.

[Gowen]

It used to be that if you wanted to retire well, get a state or government job.  Looks like that gravy boat is running dry.  My sister is a school teacher, she can retire in a year or two...  Maybe not, Nevada is broke.  In 2006 the dems cleaned up here and they passed every liberal dream they could think up.  If the governor vetoed a bill, they over road it at will.  They helped to break this state and now we have to pick up the pieces.

[AZRedhawk44]

Ultimately, whether it's in the constitution or not, if there's no money there, it can't be paid.  

I am terrified of the actual argument that:

1.  It's in the Constitution;
2.  State declares Bankruptcy;
3.  Constitutional Provision "X" is viewed by Bankruptcy Court as being a burden on the Bankruptcy proceedings;
4.  Bankruptcy Judge vetoes Constitution.

Think about it:

"Law enforcement costs due to gang violence, terrorism and senseless gun crimes are expensive epidemics that plague the coffers of our State, draining money from our Constitutionally Mandated Health Care.  As such, as Bankruptcy Judge in this proceeding, I'm nullifying the [2nd? depends on the State] Amendment to the State Constitution permitting the citizens of this state to keep and bear arms.  Citizens must turn in all firearms after these proceedings are concluded."

How is that any different than yanking Health Care out of a Constitutional Provision?

I hate Health Care and Socialism... but if a State put them in the Constitution, then it seems to me that the only body that can pull it back out would be the State legislature proposing it and then putting it to public referendum.

Judges CANNOT strike the State Constitution, any more than SCOTUS can strike the Constitution of the United States.

[makattak]

I am terrified of the actual argument that:

1.  It's in the Constitution;
2.  State declares Bankruptcy;
3.  Constitutional Provision "X" is viewed by Bankruptcy Court as being a burden on the Bankruptcy proceedings;
4.  Bankruptcy Judge vetoes Constitution.

Think about it:

"Law enforcement costs due to gang violence, terrorism and senseless gun crimes are expensive epidemics that plague the coffers of our State, draining money from our Constitutionally Mandated Health Care.  As such, as Bankruptcy Judge in this proceeding, I'm nullifying the [2nd? depends on the State] Amendment to the State Constitution permitting the citizens of this state to keep and bear arms.  Citizens must turn in all firearms after these proceedings are concluded."

How is that any different than yanking Health Care out of a Constitutional Provision?

I hate Health Care and Socialism... but if a State put them in the Constitution, then it seems to me that the only body that can pull it back out would be the State legislature proposing it and then putting it to public referendum.

Judges CANNOT strike the State Constitution, any more than SCOTUS can strike the Constitution of the United States.

Actually I have no problem with this.

If a state declares bankruptcy, their entire constitution should be invalidated. They should become a territory and have to reincorporate as a state or several states.

If you screwed up so bad as to need bankruptcy, we should reorganize you like any company.

[zahc]

That actually makes sense. And no golden parachutes for the leaders, either.

[HankB]

If a state declares bankruptcy, their entire constitution should be invalidated. They should become a territory and have to reincorporate as a state or several states.

If you screwed up so bad as to need bankruptcy, we should reorganize you like any company.

You know, this idea seems to have merit . . . a lot of merit.

(Territories don't have voting congressional delegations in the US Congress, do they?    )

[Headless Thompson Gunner]

Neither is education.

Not so.  Most states codify public education in their constitutions.

[Headless Thompson Gunner]

Actually I have no problem with this.

If a state declares bankruptcy, their entire constitution should be invalidated. They should become a territory and have to reincorporate as a state or several states.

If you screwed up so bad as to need bankruptcy, we should reorganize you like any company.

I think this makes a lot of sense, but it's still worrisome.  I'm not confident that a newly constituted state turn out any better than the old state.

The political forces that drive states into bankruptcy won't disappear overnight.  Any given state that fell hard for lefty foolishness and wrecked its finances will likely still be driven by lefty foolishness while it's reincorporating itself.  Can you imagine giving the people who ran California and Illinois into the ground a clean slate to remake their states however they want?

[MillCreek]

http://www.cnbc.com/id/40791768/Alabama_Town_s_Failed_Pension_Is_a_Warning

I read this story in the NYT a few weeks ago.  I wonder if this is a harbringer of the future.  Of course, most of us on this board don't have a pension to worry about the payor going bankrupt.  The exposure for financial success or ruin has been largely shifted onto the worker by virtue of the 401(k) and other similar forms of retirement savings.

[makattak]

http://www.cnbc.com/id/40791768/Alabama_Town_s_Failed_Pension_Is_a_Warning

I read this story in the NYT a few weeks ago.  I wonder if this is a harbringer of the future.  Of course, most of us on this board don't have a pension to worry about the payor going bankrupt.  The exposure for financial success or ruin has been largely shifted onto the worker by virtue of the 401(k) and other similar forms of retirement savings.

And I have no problem with the people who screwed over the companies or cities or states to get those pensions getting screwed over when they fail. (UAW, AFSCME, SEIU)

People will whine and cry how its not the worker's fault, but it is. He joined the union, they demanded these wages and pensions, he benfited. Now he can bear the risks of his own poor judgement.

[AZRedhawk44]

Actually I have no problem with this.

If a state declares bankruptcy, their entire constitution should be invalidated. They should become a territory and have to reincorporate as a state or several states.

If you screwed up so bad as to need bankruptcy, we should reorganize you like any company.

And what if the FedGov declares bankruptcy?

Do we invalidate the COTUS as a result?

[MillCreek]

And I have no problem with the people who screwed over the companies or cities or states to get those pensions getting screwed over when they fail. (UAW, AFSCME, SEIU)

People will whine and cry how its not the worker's fault, but it is. He joined the union, they demanded these wages and pensions, he benfited. Now he can bear the risks of his own poor judgement.

I wonder if we would be making the same argument if Federal pensions; for example for military service, failed.

[longeyes]

The politicians put us in a bind.  Because of their machiavellian mendacity someone has to get gored.  The issue isn't whether, it's WhO.  It's either to going to be the recipients of public monies--in this case pension holders--or the taxpayers. 

[makattak]

And what if the FedGov declares bankruptcy?

Do we invalidate the COTUS as a result?

FedGov can't declare bankruptcy, there would be no courts as a higher authority to reorganize.

I wonder if we would be making the same argument if Federal pensions; for example for military service, failed.

I would make the same argument and except the military from that. I am more than willing to state that I value their service more and would willingly honor their agreements. Further, there's no military union that has lobbied the government for said benefits.

[Headless Thompson Gunner]

I recall reading about a state law in Michigan, pushed in by the public employee unions, that makes it illegal for a city to declare bankruptcy without first asking the state for permission.  Bankruptcy would be better for the cities, and better for their residents and taxpayers, but not for the retired public employees living on gluttonous pensions.

[Headless Thompson Gunner]

FedGov can't declare bankruptcy, there would be no courts as a higher authority to reorganize.

FedGov would never need to declare bankruptcy, because they have control over the currency and could choose to inflate rather than default.

[HankB]

I recall reading about a state law in Michigan, pushed in by the public employee unions, that makes it illegal for a city to declare bankruptcy without first asking the state for permission.  Bankruptcy would be better for the cities, and better for their residents and taxpayers, but not for the retired public employees living on gluttonous pensions.

If a city has no money, no capacity to borrow, no property to sell, and can't squeeze whatever tax base it has left to cover the expenses, formal declaration of bankrupty might be moot.

To borrow an old proverb, you can't squeeze blood out of a turnip.

[Headless Thompson Gunner]

To borrow an old proverb, you can't squeeze blood out of a turnip.

This is the essence of the problem. Whatever promises we've made, and however much reverence we may have for those promises, what happens when we just don't have enough money to go around?

Bankruptcy is the usual solution, and I see no reason not to employ it here.

[Seenterman]

I would make the same argument and except the military from that. I am more than willing to state that I value their service more and would willingly honor their agreements.

What about the police? Do you hate police officers?! What about the firemen!?!?

Y U HATE FIREMEN?

 

[grampster]

I agree with the notion that if a state declares bankruptcy, it is dissolved as a corporation.  But I don't think it should be allowed to reincorporate.  The territory should be divvied up in equal landmass portions by the surrounding states.

Do I hear any bidders for Detroit and Flint??

[Angel Eyes]

Do I hear any bidders for Detroit and Flint??

*crickets*