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States cry for aid but Erskine Bowles and Alan Simpson, co-chairs of Obama's debt commission,...

States cry for aid but Erskine Bowles and Alan Simpson, co-chairs of Obama's debt commission, say states can’t count on the federal government for more budget bailouts. But Illinois Gov. Pat Quinn says comparing her state to Greece is "ridiculous... We have provisions in our constitution that are very protective of those who purchase bonds."
Comments (16)
  • Tim Meador
    , contributor
    Comments (32) | Send Message
     
    From above

     

    "But Illinois Gov. Pat Quinn says comparing her state to Greece is ..."

     

    Despite his androgynous first name, the illustrious Governor Quinn is a man.
    12 Jul 2010, 04:41 PM Reply Like
  • David Levner
    , contributor
    Comments (26) | Send Message
     
    When large financial institutions became insolvent in 2008, the federal government did not have the appropriate tools to allow them to fail without destabilizing the entire financial system, and hence we had crises and bailouts.

     

    If U.S. states become insolvent in the next few years, the federal government also does not have appropriate tools. Congress should be pro-active instead reactive and pass legislation now to create some form of bankruptcy or receivership for a U.S. state. But Congress's style is to wait until there is a crisis.

     

    When I read about the finances of Illinois and some other states, I become angry. The bailout of any state should come with severe consequences including loss of budgetary power, strict financial oversight, investigations and possibly prosecutions.
    12 Jul 2010, 04:58 PM Reply Like
  • Ohrama
    , contributor
    Comments (521) | Send Message
     
    So, the state problems will be solved by a federal government take over? The federal model would be spend (or bail out) now and postpone the consequences 10 year down the road!.
    12 Jul 2010, 05:07 PM Reply Like
  • woollyB
    , contributor
    Comments (1019) | Send Message
     
    The better quote from that article is this:

     

    “The pig is dead,” said Simpson, referring to so-called pork-barrel spending that Congress directs to states. “There’s no more bacon.”
    12 Jul 2010, 04:58 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3533) | Send Message
     
    It is interesting that the Chicago Public School System was doing so poorly that Mayor Daley (the younger) seized control of the system to 'reform' it. As I recall there wasn't much improvement. A government seizure of state powers, forgetting about the constitutional question, would probably be a similar failure.
    12 Jul 2010, 05:34 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Is it reasonable to suggest that
    1. At least a couple of significant US States will hit the debt wall this year;
    2. Given the fractious state of politics at both the National level and in many States, it is difficult to see a efficient, effective or timely resolution of such a debt crisis should one arise in one or more States;
    3. While not currently seen as major economic issue, the inability to resolve such an impasse could have major economic ramifications (particularly because it would not have been generally anticipated)?
    12 Jul 2010, 05:51 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    I don´t see anything happening....and that is how it WILL Crash....the politicians do not have the guts to correct it...it is to much spending..period...they need to cut..but won´t....so they will just run out of money...people work for awhile..but then they will see that they are not going to get paid...and will revolt..or something...
    12 Jul 2010, 06:59 PM Reply Like
  • Machiavelli999
    , contributor
    Comments (829) | Send Message
     
    I know I am talking to a wall here (yes I mean you typical, perma-bear SA Commenter), but most of the state's budget deficits are not due to excessive spending.

     

    Look at South Carolina. Look at Arizona. They all have budget problems. These are conservative states, headed up by prominent deficit hawks.

     

    The reason? Well, here is a big news FLASH for you. There are two sides to the budget: spending and TAX REVENUES.

     

    Because of the economy, tax revenues have plummeted. And hence, even with all the cuts that have already been made, its not enough. (And by the way, no matter how much has been cut, it will not be enough for the "youngmans" of the world.)

     

    There are two solutions. The first course is to cut spending. That's the always the appealing choice. Of course, when people say they want to cut spending they always envision cuts to welfare for poor, lazy, bla...umm i mean, oops, umm..people, yea people.

     

    However, to have any SERIOUS spending cuts it involves firing hundreds and hundreds of police officers, firemen and teachers. Then of course people don't like that. In addition, firing all these people simply adds on to recessionary forces already in place in the economy. This further reduces tax revenues and the cycle continues.

     

    Of course, the obvious solution is to provide emergency loans to the states with conditions in order to be paid back. But I am not even going to discuss that, because it's a political impossibility right now.

     

    Now, of course remember, that according to the perma-bear SA commenters, cutting government spending should be good for the economy. So, if they were intellectually honest, they should think that cutting all this spending should be great for the economy. Surprisingly, some commenters have been making that case, including Calafia Beach Pundit. Now, when all this cuts in state spending push us into a double-dip will they admit they were wrong? Nope. They will just concoct another story and claim not enough was cut.
    12 Jul 2010, 08:27 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Machiavelli999 -

     

    You are correct to say that realistic tax revenue needs to be part of any realistic solution.
    12 Jul 2010, 08:42 PM Reply Like
  • MiniB
    , contributor
    Comments (55) | Send Message
     
    You've left out the unfunded mandates handed to the states by DC.
    12 Jul 2010, 08:50 PM Reply Like
  • Duude
    , contributor
    Comments (3393) | Send Message
     
    "However, to have any SERIOUS spending cuts it involves firing hundreds and hundreds of police officers, firemen and teachers."

     

    This is the most tired, and overused progressive talking points in existence today. The real truth is that in many states extremely generous state employee pension plans are at the heart of what's driving states into bankruptcy. Too many state employees make more in retirement than they made while on the job. Plenty of politicians ignored long term financial realities for the sake of the campaign support they'd receive in the short term. It seemed like an easy exchange because it likely be a long time before it blew up in everyone's face. But things change. Partly due to the poorly performing market things changed fast. Now we can see clearly they F*cked us royally.
    13 Jul 2010, 12:09 AM Reply Like
  • Machiavelli999
    , contributor
    Comments (829) | Send Message
     
    Those are long-term fiscal concerns. I completelly agree. But they are unfunded obligations in the FUTURE. They will undoubtedly need to be dealt with. But these are not problems now.

     

    Honestly, how can you live in today's world and not realize that teachers, firemen and police officers are being fired every day. Don't make me post dozens of links. Just do a google search.
    13 Jul 2010, 01:46 AM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    IL is WORSE than Greece. a $14B hole in a $28B budget? Fire all the public unions and outsource everything. He's a whore to the public unions.
    12 Jul 2010, 07:03 PM Reply Like
  • sladd
    , contributor
    Comments (123) | Send Message
     
    But Illinois Gov. Pat Quinn:

     

    your pension liabiliites are more than you admit

     

    your state will be in dire straits to meet your liabilities

     

    you are not informing your state residents of the coming tsunami of pension liabilities

     

    you are unable to stand up for what is right as a fiduciary of the state

     

    business as usual under your admin.
    12 Jul 2010, 08:55 PM Reply Like
  • gertude
    , contributor
    Comments (6) | Send Message
     
    I sat in a WICK office in Arizona with a friend & watched for 2 hours as one non English speaking Hispanic woman after another came with between 1 & 5 babies & toddlers. The mothers were all illegal aliens. Most claimed not to know the whereabouts of the father of the children who were all born in the US at tax payer expense. Many of the children were on welfare as they were US citizens and they received taxpayer funded WICK. During the two hours I sat there I saw one Caucasian woman and one black lady seeking benefits. These women purposely have numerous children because they know they won't be deported because the kids are US citizens. close the boarders. save billions
    12 Jul 2010, 11:47 PM Reply Like
  • bigduder
    , contributor
    Comments (34) | Send Message
     
    Gertude,
    I agree with you accept once the borders are close, Mexico will collapse in a year or two and we will have to pull troops from the middle east to take control of Mexico. We don't need Pakistan on our boarder.

     

    I agree also with Youngman442002, I don't like where this is going and I worry that we could see some kind of riots in a year or so.

     

    Maybe I should put my head in the sand and stay off the internet!
    13 Jul 2010, 03:08 AM Reply Like
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