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There was an interesting piece in this week's Atlantic on the motivation for having states declare bankruptcy: "Under the Constitution, bankruptcy is a power e

There was an interesting piece in this week's Atlantic on the motivation for having states declare bankruptcy: "Under the Constitution, bankruptcy is a power entirely reserved to the federal government. An American bankruptcy is overseen in federal court, by a federal judge, according to federal law. That’s why federal law can allow U.S. cities to go bankrupt, as many have done over the years. That’s why the financial restructuring of Puerto Rico can be overseen by a federal control board. Cities and territories are not sovereigns. Under the U.S. Constitution, U.S. states are. Understand that, and you begin to understand the appeal of state bankruptcy to Republican legislators in the post-2010 era." https://www.theatlantic.com/ideas/archive/2020/04/why-mitch-mcconnell-wants-states-go-bankrupt/610714/ https://www.theatlantic.com/ideas/archive/2020/04/why-mitch-...

huevosabio 7y ago
This is a pretty grim path to follow. If States are to go bankrupt and subject to federal imposition of what debts must be paid, then it may push States to seek further sovereignity. An example being pressure to mint their currency. This is currently banned in the constitution, but if things get dire... they could simply ignore?
- eranima 7y ago
  The constitution only has power if people are willing or motivated to enforce it.
  - sangnoir 7y ago
    In the apocryphal words of president Andrew Jackson: "John Marshall has made his decision; now let him enforce it!"
- seibelj 7y ago
  I would prefer that states have more power and we further decentralize authority away from the federal government. This will limit the see-saw that occurs whenever the president switches parties.
  - bilbo0s 7y ago
    I wouldn't. There is a comfort that comes from the instability of party switches. The parties don't cooperate, which means less can get done. Anything that puts anyone in an area where one of the gangs of politicians can actually do something, is to be avoided. We've learned that the hard way in Wisconsin. As a general rule, it's always best to split up your government as much as you can.
    - afterburner 7y ago
      Less gets done means the country gets worse and people get more radicalized trying to improve things. The polarization in the US is likely a direct result of the massive deadlock. Your strategy is one guaranteed to ruin your country.
      - jshevek 7y ago
        >Less gets done means the country gets worse and people get more radicalized trying to improve things. This opinion requires a great deal of justification.
        mikepurvis 7y ago
        Isn't that exactly what we're seeing now? The government has basically been in gridlock since 2010, and voters have increasingly rewarded extreme policians who seek to shift the overton window over compromise politicians who work across party lines to find a middle ground. The book American Carnage is a fantastic deep dive on this (and extremely fair and even-handed, despite the bombastic title).
        jshevek 7y ago
        >Isn't that exactly what we're seeing now? If "that" is the cause-effect relationship claimed above, no we are not "seeing" this right now. There is a huge difference between events and the narratives, accurate or otherwise, which some people use to explain those events. The system under consideration is insanely complex, with an immense list of causal factors at play. To me, in my opinion, it's obvious that the causal relationship described above is at best a tiny contributor that is, itself, dependent on other factors also being present. At worst, it's completely wrong and a distraction from understanding the real causes.
- londons_explore 7y ago
  Surely before being bankrupt, a state would be forced to raise sales/income taxes? At some point, those taxes would be so high, people would start leaving the state, and at the point of bankruptcy, the state would be a ghosttown.
- lonelappde 7y ago
  States already have sovereignty. They can simply decline to pay back bondholders.
- deleted 7y ago
  [deleted]
- grappler 7y ago
  The train of thought I'm on now is: why was keeping the Union together back in the civil war such a great thing? Now we have this bloc of red states in the South who are backward, racist, intolerant science deniers, and they've managed to get just enough on the winning side of the electoral map to make the advanced, multicultural, cosmopolitan science-respecting blue states' lives miserable. That chunk of states should be a separate country. Then they can go their own way and the rest of us can carry on without them.
  - tiles 7y ago
    The abolition of slavery was worth it. But the failure of Reconstruction allowed the south to backside right where they were.
    - grappler 7y ago
      yeah, abolition of slavery is a noble cause, obviously, but the rhetoric at that time put a lot of emphasis on the importance of preserving the union, as if that in and of itself was a valuable thing. I propose that it wasn't, and isn't. Humans are happier if they're grouped together with their own tribe, and not with other neighboring tribes they don't identify with. In this way it's like some of the problems in Africa and the Middle East where the groups there had borders imposed on them that didn't follow this simple principle.
  - chao- 7y ago
    The resolution you choose has some stark effects on the narrative that you will allow yourself to be convinced of. The idea of "red state, blue state" is a peculiar consequence of a winner-take-all presidential election system, and does not adequately represent reality. An underlying truth, viewed at another resolution, is that there are red and blue densities moreso than states [0]. The current (and changing) distribution of densities across the states has currently led to what you perceive as the "red state, blue state" situation, when zoomed out and with a blur filter applied For example, take a useful look at CityLab's Congressional Density Indicator [1]. There are zero "pure urban" districts that are represented by Republicans, regardless of the state (red, blue, purple), and there are nearly none among the "urban-suburban mix" districts (again regardless of state). Viewed through yet another lens, by percentage of landmass, Alabama is more is more "blue" than Illinois and Oregon [2]. Your characterization could use a little more thought and refinement. [0] https://www.niskanencenter.org/wp-content/uploads/2019/09/Wilkinson-Density-Divide-Final.pdf https://www.niskanencenter.org/wp-content/uploads/2019/09/Wi... (see section beginning page 12) [1] https://www.citylab.com/equity/2018/11/citylab-congressional-density-index/575749/ https://www.citylab.com/equity/2018/11/citylab-congressional... [2] https://www.nytimes.com/interactive/2018/upshot/election-2016-voting-precinct-maps.html https://www.nytimes.com/interactive/2018/upshot/election-201...
Shivetya 7y ago
His unwillingness to not solve the state's pension problems should be applauded. the amount of unfunded liabilities is in the hundreds of billions of dollars and approaching a trillion if it has not passed that already. This all happened because the number of public servants who are pulling in over 100k has skyrocketed... 100k+ in retirement.. with millions past 50k! Think about that 50k in pay plus medical. These pensions and their medical side are the reason why the ACA did not touch golden medical plans because the vast majority are in this area along with certain other larger private pension systems. By the way, the House silently dropped that provision entirely from the ACA in 2019 so they any taxation of them is gone. My favorite story to fall back on is provided below... and there are other states worse off. This type of largess should never have been allowed nor should the tax payer bail them out. People bemoan the pay of executives at private companies, well guess who is right up there in many cases. https://www.forbes.com/sites/adamandrzejewski/2018/10/26/illinois-100000-club-94000-six-figure-public-employees-and-retirees-cost-taxpayers-12b/#5b185547481a https://www.forbes.com/sites/adamandrzejewski/2018/10/26/ill...
- lonelappde 7y ago
  Should the Federal government return tax money it took from the people of New York to give to the people of Kentucky? Why or why or why not? The Federal government can easily tax /discredit those wealthy pensioners to fund unemployment insurance, if they do choose.
  - DiogenesKynikos 7y ago
    It's amazing that the US Federal government seems to be able to provide trillions of dollars in liquidity on a moment's notice to anyone and everyone - except the states. Airlines? Of course. Junk bond investors? Sure, why not? States? "We're not going to bail out Democratic-run states."
    - mrnobody_67 7y ago
      Don't forget Carnival Cruise Lines... which doesn't even pay any taxes in the US as a corporation since it flies a flag of convenience and doesn't employ many Americans.
lonelappde 7y ago
The Atlantic author seems deeply confused. Not unexpected for David Frum. Puerto Rico is a territory, not in any state. A city is under state sovereignty.A state or a city can default. A city can declare bankruptcy under Federal law. There is no law allowing a state to go bankrupt and be managed by the Feds. Bankruptcy is an option , not a Federal power. McConnell isn't playing 7 dimensional chess, he just doesn't want to return tax money to Blue states and was just using language loosely when he said "bankrupt".
- mikepurvis 7y ago
  > he [totally meant some other thing] and was just using language loosely when he said "bankrupt". If that's so then he's had plenty of opportunity to make that known. Based on the media frenzy around this, it's quite clear that he meant and continues to mean a literal, actual, non-sarcastic bankruptcy.
JustSomeNobody 7y ago
I don't understand how someone can love their political party as much as Mitch McConnell does. It's party before all else. I don't get it. At all.
- jonny_eh 7y ago
  It's a strategy/ideology he's been rewarded for following?
  - JustSomeNobody 7y ago
    But this isn't a game. It has real consequences.
    - state_less 7y ago
      For whom? Mitch McConnell?
    - kradroy 7y ago
      It is a game. The consequences are varied, but for McConnell they are generational wealth, the self-satisfaction of entrenching Republican values in the Federal court system for at least another generation and the destruction of senatorial traditions that were centuries old.
- sciurus 7y ago
  https://www.newyorker.com/magazine/2020/04/20/how-mitch-mcconnell-became-trumps-enabler-in-chief https://www.newyorker.com/magazine/2020/04/20/how-mitch-mcco... is an interesting read related to this.
A4ET8a8uTh0 7y ago
In their defense, PR is spectacularly mismanaged. I love the place. I love the food. I love the culture, but there is something really annoying about an island, where everyone is on island time and blackouts are just a part of daily routine.
skybrian 7y ago
Is it legal for a state to declare bankruptcy or would Congress have to pass a law? It doesn't seem like the House would be interested.
- kradroy 7y ago
  It's not legal for a US state to declare bankruptcy. There are three relevant parts in the US Constitution that preclude this action. One says that US states are not allowed to abrogate their contractual obligations (pensions, debts, etc). Another says US states are sovereign in their own right. The Federal government cannot act on them directly. All bankruptcy procedures (personal, corporate, municipal) are dealt with at the federal level. Having a federal court process a state bankruptcy would violate state sovereignty, because the federal government would be acting on a state directly. A law would have to be passed and there would probably be a challenge to it that would eventually go before the US Supreme Court.
killjoywashere 7y ago
Interesting that the author is not a Democrat: David Frum was a speechwriter for George W. Bush.

huevosabio 7y ago

This is a pretty grim path to follow. If States are to go bankrupt and subject to federal imposition of what debts must be paid, then it may push States to seek further sovereignity. An example being pressure to mint their currency. This is currently banned in the constitution, but if things get dire... they could simply ignore?

eranima 7y ago
The constitution only has power if people are willing or motivated to enforce it.
- sangnoir 7y ago
  In the apocryphal words of president Andrew Jackson: "John Marshall has made his decision; now let him enforce it!"
seibelj 7y ago
I would prefer that states have more power and we further decentralize authority away from the federal government. This will limit the see-saw that occurs whenever the president switches parties.
- bilbo0s 7y ago
  I wouldn't. There is a comfort that comes from the instability of party switches. The parties don't cooperate, which means less can get done. Anything that puts anyone in an area where one of the gangs of politicians can actually do something, is to be avoided. We've learned that the hard way in Wisconsin. As a general rule, it's always best to split up your government as much as you can.
  - afterburner 7y ago
    Less gets done means the country gets worse and people get more radicalized trying to improve things. The polarization in the US is likely a direct result of the massive deadlock. Your strategy is one guaranteed to ruin your country.
    - jshevek 7y ago
      >Less gets done means the country gets worse and people get more radicalized trying to improve things. This opinion requires a great deal of justification.
      - mikepurvis 7y ago
        Isn't that exactly what we're seeing now? The government has basically been in gridlock since 2010, and voters have increasingly rewarded extreme policians who seek to shift the overton window over compromise politicians who work across party lines to find a middle ground. The book American Carnage is a fantastic deep dive on this (and extremely fair and even-handed, despite the bombastic title).
        jshevek 7y ago
        >Isn't that exactly what we're seeing now? If "that" is the cause-effect relationship claimed above, no we are not "seeing" this right now. There is a huge difference between events and the narratives, accurate or otherwise, which some people use to explain those events. The system under consideration is insanely complex, with an immense list of causal factors at play. To me, in my opinion, it's obvious that the causal relationship described above is at best a tiny contributor that is, itself, dependent on other factors also being present. At worst, it's completely wrong and a distraction from understanding the real causes.
londons_explore 7y ago
Surely before being bankrupt, a state would be forced to raise sales/income taxes? At some point, those taxes would be so high, people would start leaving the state, and at the point of bankruptcy, the state would be a ghosttown.
lonelappde 7y ago
States already have sovereignty. They can simply decline to pay back bondholders.
deleted 7y ago
[deleted]
grappler 7y ago
The train of thought I'm on now is: why was keeping the Union together back in the civil war such a great thing? Now we have this bloc of red states in the South who are backward, racist, intolerant science deniers, and they've managed to get just enough on the winning side of the electoral map to make the advanced, multicultural, cosmopolitan science-respecting blue states' lives miserable. That chunk of states should be a separate country. Then they can go their own way and the rest of us can carry on without them.
- tiles 7y ago
  The abolition of slavery was worth it. But the failure of Reconstruction allowed the south to backside right where they were.
  - grappler 7y ago
    yeah, abolition of slavery is a noble cause, obviously, but the rhetoric at that time put a lot of emphasis on the importance of preserving the union, as if that in and of itself was a valuable thing. I propose that it wasn't, and isn't. Humans are happier if they're grouped together with their own tribe, and not with other neighboring tribes they don't identify with. In this way it's like some of the problems in Africa and the Middle East where the groups there had borders imposed on them that didn't follow this simple principle.
- chao- 7y ago
  The resolution you choose has some stark effects on the narrative that you will allow yourself to be convinced of. The idea of "red state, blue state" is a peculiar consequence of a winner-take-all presidential election system, and does not adequately represent reality. An underlying truth, viewed at another resolution, is that there are red and blue densities moreso than states [0]. The current (and changing) distribution of densities across the states has currently led to what you perceive as the "red state, blue state" situation, when zoomed out and with a blur filter applied For example, take a useful look at CityLab's Congressional Density Indicator [1]. There are zero "pure urban" districts that are represented by Republicans, regardless of the state (red, blue, purple), and there are nearly none among the "urban-suburban mix" districts (again regardless of state). Viewed through yet another lens, by percentage of landmass, Alabama is more is more "blue" than Illinois and Oregon [2]. Your characterization could use a little more thought and refinement. [0] https://www.niskanencenter.org/wp-content/uploads/2019/09/Wilkinson-Density-Divide-Final.pdf https://www.niskanencenter.org/wp-content/uploads/2019/09/Wi... (see section beginning page 12) [1] https://www.citylab.com/equity/2018/11/citylab-congressional-density-index/575749/ https://www.citylab.com/equity/2018/11/citylab-congressional... [2] https://www.nytimes.com/interactive/2018/upshot/election-2016-voting-precinct-maps.html https://www.nytimes.com/interactive/2018/upshot/election-201...

Shivetya 7y ago

His unwillingness to not solve the state's pension problems should be applauded. the amount of unfunded liabilities is in the hundreds of billions of dollars and approaching a trillion if it has not passed that already. This all happened because the number of public servants who are pulling in over 100k has skyrocketed... 100k+ in retirement.. with millions past 50k! Think about that 50k in pay plus medical. These pensions and their medical side are the reason why the ACA did not touch golden medical plans because the vast majority are in this area along with certain other larger private pension systems. By the way, the House silently dropped that provision entirely from the ACA in 2019 so they any taxation of them is gone. My favorite story to fall back on is provided below... and there are other states worse off. This type of largess should never have been allowed nor should the tax payer bail them out. People bemoan the pay of executives at private companies, well guess who is right up there in many cases. https://www.forbes.com/sites/adamandrzejewski/2018/10/26/illinois-100000-club-94000-six-figure-public-employees-and-retirees-cost-taxpayers-12b/#5b185547481a https://www.forbes.com/sites/adamandrzejewski/2018/10/26/ill...

lonelappde 7y ago
Should the Federal government return tax money it took from the people of New York to give to the people of Kentucky? Why or why or why not? The Federal government can easily tax /discredit those wealthy pensioners to fund unemployment insurance, if they do choose.
- DiogenesKynikos 7y ago
  It's amazing that the US Federal government seems to be able to provide trillions of dollars in liquidity on a moment's notice to anyone and everyone - except the states. Airlines? Of course. Junk bond investors? Sure, why not? States? "We're not going to bail out Democratic-run states."
  - mrnobody_67 7y ago
    Don't forget Carnival Cruise Lines... which doesn't even pay any taxes in the US as a corporation since it flies a flag of convenience and doesn't employ many Americans.

lonelappde 7y ago

The Atlantic author seems deeply confused. Not unexpected for David Frum. Puerto Rico is a territory, not in any state. A city is under state sovereignty.A state or a city can default. A city can declare bankruptcy under Federal law. There is no law allowing a state to go bankrupt and be managed by the Feds. Bankruptcy is an option , not a Federal power. McConnell isn't playing 7 dimensional chess, he just doesn't want to return tax money to Blue states and was just using language loosely when he said "bankrupt".

mikepurvis 7y ago
> he [totally meant some other thing] and was just using language loosely when he said "bankrupt". If that's so then he's had plenty of opportunity to make that known. Based on the media frenzy around this, it's quite clear that he meant and continues to mean a literal, actual, non-sarcastic bankruptcy.

JustSomeNobody 7y ago

I don't understand how someone can love their political party as much as Mitch McConnell does. It's party before all else. I don't get it. At all.

jonny_eh 7y ago
It's a strategy/ideology he's been rewarded for following?
- JustSomeNobody 7y ago
  But this isn't a game. It has real consequences.
  - state_less 7y ago
    For whom? Mitch McConnell?
  - kradroy 7y ago
    It is a game. The consequences are varied, but for McConnell they are generational wealth, the self-satisfaction of entrenching Republican values in the Federal court system for at least another generation and the destruction of senatorial traditions that were centuries old.
sciurus 7y ago
https://www.newyorker.com/magazine/2020/04/20/how-mitch-mcconnell-became-trumps-enabler-in-chief https://www.newyorker.com/magazine/2020/04/20/how-mitch-mcco... is an interesting read related to this.

A4ET8a8uTh0 7y ago

In their defense, PR is spectacularly mismanaged. I love the place. I love the food. I love the culture, but there is something really annoying about an island, where everyone is on island time and blackouts are just a part of daily routine.

skybrian 7y ago

Is it legal for a state to declare bankruptcy or would Congress have to pass a law? It doesn't seem like the House would be interested.

kradroy 7y ago
It's not legal for a US state to declare bankruptcy. There are three relevant parts in the US Constitution that preclude this action. One says that US states are not allowed to abrogate their contractual obligations (pensions, debts, etc). Another says US states are sovereign in their own right. The Federal government cannot act on them directly. All bankruptcy procedures (personal, corporate, municipal) are dealt with at the federal level. Having a federal court process a state bankruptcy would violate state sovereignty, because the federal government would be acting on a state directly. A law would have to be passed and there would probably be a challenge to it that would eventually go before the US Supreme Court.

killjoywashere 7y ago

Interesting that the author is not a Democrat: David Frum was a speechwriter for George W. Bush.