Comments on: The latest on states declaring bankruptcy http://blogs.reuters.com/james-pethokoukis/2011/01/27/the-latest-on-states-declaring-bankruptcy/ Politics and policy from inside Washington Sun, 07 Apr 2013 21:23:48 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: Gotthardbahn http://blogs.reuters.com/james-pethokoukis/2011/01/27/the-latest-on-states-declaring-bankruptcy/comment-page-1/#comment-10694 Gotthardbahn Fri, 28 Jan 2011 16:16:09 +0000 http://blogs.reuters.com/james-pethokoukis/?p=5692#comment-10694 'An additional benefit of a new voluntary bankruptcy law for states is that its mere existence may deter any state from ever availing itself of its provisions.' Precisely. After reading much of Mr. P's writings on the subject and Felix Salmon's shocked rejoinders, it occurred to me that this proposed state bankruptcy legislation would likely NEVER be used, much like nuclear weapons during the cold war. Their mere existence was enough to keep the other side in check or, in this case, keeping rapacious public sector union bosses and their followers from looting the state treasury. ‘An additional benefit of a new voluntary bankruptcy law for states is that its mere existence may deter any state from ever availing itself of its provisions.’

Precisely. After reading much of Mr. P’s writings on the subject and Felix Salmon’s shocked rejoinders, it occurred to me that this proposed state bankruptcy legislation would likely NEVER be used, much like nuclear weapons during the cold war. Their mere existence was enough to keep the other side in check or, in this case, keeping rapacious public sector union bosses and their followers from looting the state treasury.

]]> By: cwillia11 http://blogs.reuters.com/james-pethokoukis/2011/01/27/the-latest-on-states-declaring-bankruptcy/comment-page-1/#comment-10687 cwillia11 Fri, 28 Jan 2011 10:46:41 +0000 http://blogs.reuters.com/james-pethokoukis/?p=5692#comment-10687 It is hard to understand what bankruptcy would accomplish. The states are sovereign. They can abolish public sector unions and nullify contracts. They can default on their bonds. The only recourse would be the states' courts and the jurisdiction of the courts is a matter of state law or the constitution. Conversely, how could a state legislature or governor get a bankruptcy court to agree to a restructuring that violates a state's constitution. It is hard to understand what bankruptcy would accomplish. The states are sovereign. They can abolish public sector unions and nullify contracts. They can default on their bonds. The only recourse would be the states’ courts and the jurisdiction of the courts is a matter of state law or the constitution. Conversely, how could a state legislature or governor get a bankruptcy court to agree to a restructuring that violates a state’s constitution.

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