From yesterday’s NYT:
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers. …
Unlike cities, the states are barred from seeking protection in federal bankruptcy court. …
But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.
I said that bankruptcy should be an option in my response to the Chicago Tribune’s Ed. Board. No one else but this on the table.
More and more people are realizing that cities and states are under-water and that something must be done. Bad management led to the collapse of GM. Similar bad management has led to the collapse of Chicago and Illinois. Why can’t we seek a similar remedy?
It’s not going to be pretty; but neither is falling off the cliff like Detroit.