Gruss Gott wrote: > Jochem wrote: >> In terms of the real economy it doesn't mean anything, it is just numbers. > > The problem is that, as Robert pointed out, State and city governments > have been promising to pay their employees pensions that they can't > currently afford for decades. At some point this has to catch up with > them and that point is here.
Why is that point here? What is the magical number that decides that it is going to happen *now*? > The first wave of cities heading for default began about 5 years ago > when cities had to stop hiring and forego necessary work in order to > pay their pension obligations. That will increase to the point where > the cities and states can no longer conduct daily business and then a > default will occur. > > At that point the pensioners can sue the government or the government > can come up with the money. > > In order to come up with the money they either have to raise taxes or > get a federal bailout which would come from federal taxes. Would they get a federal bailout when they don't have bankrupcy protection? What exactly happens when a government gets bankrupcy protection? > 1.) City and state persion and medical benefit default (starting) + I don't see the bailout happen. Technically it is even questionable if a government can have a solvability crisis, or only a liquidity crisis. > 2.) Corporate pension default (steel has happened, airlines in > progress, then auto) And that is very, very wrong on o so many levels. > That, of course, also ignores the fact that the US already borrows $3 > billion a day to operate. So where is the bailout money going to come > from? Taxes of course. But I don't see local and state governments being bailed out federally. Jochem ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Purchase RoboHelp from House of Fusion, a Macromedia Authorized Affiliate and support the CF community. http://www.houseoffusion.com/banners/view.cfm?bannerid=59 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:157699 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
