Our Alleged Leaders
When bankruptcy results from irresponsible behavior, there is shame, or should be. Those undergoing it shouldn’t be trusted with authority or power until they demonstrate change. When the hammer falls on them, they try to shift blame for their ineptitude and others are disinclined to help.
What does it look like when governments go bankrupt? We get an idea watching cities deal with it. The most recent is Stockton, California, which has many problems but like most governments, their biggest problem is pensions. Politicians promised more than governments could deliver but they don’t want to admit that. Cities are facing the same crunch our federal government is, but neither Stockton nor the feds want to take responsibility. They’re looking for others to blame and observers are not inclined to help until they admit culpability.
When discovering it couldn’t pay for pie-in-the-sky pensions, Stockton didn’t cut back. Instead, it borrowed money by issuing bonds. Now, it cannot afford to pay for either pensions or bonds and is trying to stiff bondholders. Better to confront investors than confront government unions. They’ll have to scale back pensions too, but they’re refusing to for now. Bond holders will lose almost $200 million. Can’t imagine who would ever lend money to Stockton again, so how will it pay for those pensions now? One former police chief retired at $204,000 a year after serving only eight months. How can this continue? How many times can a city go bankrupt?
according to Reuters, that’s after getting “$230,000 in one-time payouts on his last day.”
asked President Obama for a bailout last month: “Our people in an overwhelming way supported the re-election of this president and there ought to be a quid pro quo,” she said. Maybe she didn’t hear that President Obama is busy trying to dodge a bankruptcy crisis of his own.
Huffington Post admits there’s a crisis: “[Illinois has] the nation's worst case of underfunding state employees' pensions,” it declared, “a problem approaching $100 billion and mounting by $17 million per day.” Illinois recently raised income taxes by 62% but even that didn’t make a dent.
It won’t. Even if we took 100% of what “the rich” make, it wouldn’t put a dent in our ever-expanding debt. Thus we drift toward unparalleled catastrophe - because if we go belly up, there’s no one else left out there to fix it.