4 ms·
How does that work with states like IL being massively in debt due to overspending and pensions?
by candiddevmike 3y ago
How does that work with states like IL being massively in debt due to overspending and pensions?
- bombcar 3y agoIf "in debt" means "they can keep issuing bonds and people are buying them" then they're fine. If it means "they cannot make payments on bonds and cannot issue new ones because nobody wants them" then the Feds will have to step in, or they'll have to liquidate state assets (including privatizing various governmental functions, selling land and leasing it back, etc), or raise taxes to balance the budget. They literally cannot print money. This cycle has already destroyed a few cities (usually the city gets swallowed by the county). There's a step where they issue "warrants" like CA did a few times: https://taxfoundation.org/blog/california-issuing-state-warrants-pay-bills/ https://taxfoundation.org/blog/california-issuing-state-warr...
- lotsofpulp 3y agoIt means people pay sky high tax rates, and deal with lower quality government services, and the government sells of infrastructure like their parking meters. Also, land does not appreciate and the state is handicapped in attracting new highly profitable businesses. https://reason.com/2019/03/01/companies-should-avoid-states-with-huge/ https://reason.com/2019/03/01/companies-should-avoid-states-...