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>retirees forced by bankruptcy judges to take benefit cuts These people have already sold their services for a promised benefit which is now not being given to

>retirees forced by bankruptcy judges to take benefit cuts These people have already sold their services for a promised benefit which is now not being given to them. If there is bankruptcy it should come at extreme costs to the extent that the voters in the location feel pain equal to those who are having their pensions cut. Clawbacks, criminal convictions, liquidations, ensuring that the pain is not felt just by those who are having their benefits stolen and given to someone else.

nradov 9y ago
That's not how bankruptcy laws work. Voters will suffer some pain in the form of municipal service cuts and possibly higher taxes. But if current services are cut too far or taxes raised significantly then residents and businesses will simply leave, thereby further eroding the tax base and making it even harder to meet pension obligations. This is reality and no amount of whining about fairness or past promises will change it.
- PurpleBoxDragon 9y ago
  >That's not how bankruptcy laws work. Bankruptcy laws should not allow a private entity to go through bankruptcy and continue to operate while discharging its debts. The same should apply to public entities as well. That they may currently allow this is something we need to fix. If we cannot ensure debts to be met under law, then we should forbid the debts from existing to begin with.
  - nradov 9y ago
    That comment displays a rather shocking ignorance of the intent behind bankruptcy laws. When a private company is insolvent it's almost always better for the creditors, employees, and other stakeholders to work things out in reorganization rather than liquidating. Removing the option to reorganize would increase the cost of capital, reduce economic growth, and increase unemployment. While municipal corporations can dissolve, that wouldn't solve anything. County and state governments can't afford to pick up pension obligations on behalf of cities. And we'll probably find that some entire states such as Illinois can't pay their pensions. There's no way for a whole state to simply stop existing.
    - deleted 9y ago
      [deleted]

nradov 9y ago

That's not how bankruptcy laws work. Voters will suffer some pain in the form of municipal service cuts and possibly higher taxes. But if current services are cut too far or taxes raised significantly then residents and businesses will simply leave, thereby further eroding the tax base and making it even harder to meet pension obligations. This is reality and no amount of whining about fairness or past promises will change it.

PurpleBoxDragon 9y ago
>That's not how bankruptcy laws work. Bankruptcy laws should not allow a private entity to go through bankruptcy and continue to operate while discharging its debts. The same should apply to public entities as well. That they may currently allow this is something we need to fix. If we cannot ensure debts to be met under law, then we should forbid the debts from existing to begin with.
- nradov 9y ago
  That comment displays a rather shocking ignorance of the intent behind bankruptcy laws. When a private company is insolvent it's almost always better for the creditors, employees, and other stakeholders to work things out in reorganization rather than liquidating. Removing the option to reorganize would increase the cost of capital, reduce economic growth, and increase unemployment. While municipal corporations can dissolve, that wouldn't solve anything. County and state governments can't afford to pick up pension obligations on behalf of cities. And we'll probably find that some entire states such as Illinois can't pay their pensions. There's no way for a whole state to simply stop existing.
  - deleted 9y ago
    [deleted]