No less than Senator Jim DeMint let it be known today that the congressional Republicans will not allow a bail out of states who are underwater.
Illinois, California, and New Jersey are essentially broke already thanks to Democrat giveaways to the public employee unions and several other states like New York are almost there. The unfunded pension obligations are particularly scary.
DeMint favors a plan to:
(a)create a legal process to allow states to renegotiate debts and union contracts in something akin to bankruptcy.
(b) forbid a congressional bailout of the states.
(c) forbid the Fed to buy states’ debt as part of a freelance Ben Bernanke bailout.
Congress can stop a and b,but I doubt they can forbid c...which is likely how Obama plans to rescue his Blue state union constituency, by running the presses and then using the dollars to buy up state debt.If necessary,Obama can issue an executive order on that one.
In my opinion, there's no way he's going to sit back and let huge Blue states like California and Illinois go bust on his watch - not with an election coming up.Unlike the Republicans, he has something to lose here.
3 comments:
congress could order an audit of the fed.
anytime that gets mentioned the dims heads seem to collectively explode.
QE3? I don't think Bernake would be that foolish - and he is not under Obama's thumb. Actually, he has to answer more to Congress and I think he well realizes that the future of the Fed as an independent entity would be threatened if he went down that road.
I hear you GW...but remember the infamous Goldman-Sachs connection. Bernake may be more under Obama ( and Soros') thumbs than either of us realize.
I certainly would rather you were right than I in this matter.
BTW, nice to see Wolf Howling back in action.
Drop me an e-mail sometime and let me know how things are going.
Regards,
Rob
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