From: Max Sawicky : I don't think states will default. The weight will be on the rest of the budget. From the ground level, the struggle is services/benefits over debt-service, though there needs to be some backstop from the Feds if, as is likely, lenders punish the state for defaulting.
^^^^ CB: The Feds already backstopped Wall Street's Too Big Failure. So, Wallstreet owes the Feds , and derivatively all of us. ^^^^^^^^ There are all sorts of ways the Feds could increase support for state govs. I personally favor big revenue sharing, not necessarily exclusive of other devices. ^^^^^ CB: Maybe the states could negotiate modifications of their bonds, like foreclosed mortgagors are doing with their mortgages.. It would be good to dislodge some of the notion of highest priority and immutability of debts to bondholders and Wallstreet. The door is opened to undermining the concept of moral hazard generally by recently morally hazardous Wall Street. Lets kick it open wider. The powers of lenders to punish must be abated. At this time with public awareness unusually high that the biggest lenders went unpunished there is opportunity for that. We have to get political mileage against Wall Street out of the Too Big Failure. If Wall Street got such a big break on its debt defaults, everybody should get breaks on their debt defaults, especially those with Wall Street. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
