Not if a state owes you money!
Jeb Bush and Newt Gingrich just published an OpEd in the Los Angeles Times arguing that states would be wise to consider filing bankruptcy to relieve their financial troubles. They cite three states, California, Illinois and New York, while failing to mention the angry elephant in the living room with similar problems, Texas.
Texas faces a $25 billion shortfall for a $95 billion two-year budget. That equals California's 18-month deficit inherited by the recently inaugurated Governor Jerry Brown.
"So why haven't we heard more about Texas, one of the most important economy's in America? Well, it's because it doesn't fit the script. It's a pro-business, lean-spending, no-union state. You can't fit it into a nice storyline, so it's ignored," said Business Insider- Advertisement -
Texas is a major inconvenience to Bush and Gingrich. They lay the financial problems at the door of unions and state employee pensions:
"The lucrative pay and benefits packages [read pensions] that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health." Jeb Bush, Newt Gingrich, January 27
This is blatant intellectual dishonesty. By giving examples of states with strong civil servant unions, they stack the deck for their explanation of state debt. Yet the dire budget problems in Texas negate their argument entirely. That is sufficient reason to dismiss the rest of their arguments and their stated motives, as well.
The Larger Picture - Tear Down that Government at Every Level
In the past few weeks, we have seen a multilevel assault on federal, state and local governments and the programs offered, e.g., public education, roads, public safety, etc.
This year's public fretting over the federal deficit was bipartisan. Peter Peterson's budget commission produced a plan to reduce the federal deficit at the same time that President Obama's hand picked commission reported similar findings. Entitlements, Social Security in particular, require substantial cuts. They failed to note the real causes of the deficit - wars and bailouts.
Even though Social Security has a surplus, there's a repetitive mantra that You'll never get your money out of it. The budget hawks have repeated that so often, they probably believe it. And they should. They're doing everything they can to make sure that we don't see a fair return on our significant investment. The message is clear. Cut Social Security, take less than your were promised, and we'll all live happily ever after (unless you relied on the promise made by the government based on your full participation).
The second assault on government targeted local municipalities - Day of Reckoning 12/19/10. Meredith Whitney of CBS claimed her study showed that the municipal bond market was headed for collapse and chaos. Whitney failed to show her w ork and asked us to trust her. This created unrest in the bond market. Whitney clings to her evidence just the late Senator Joseph McCarthy held tight his fictitious list of 400 Communists in the Truman and Eisenhower administrations who were subverting the government.
Now, Bush and Gingrich are attacking state governments and the programs that they provide to citizens. They focus on unfunded pension liabilities that ballooned during the recession we're told is over. They fail to note the cause of those problems: the fact that pension funds relied on the Wall Street casino and fell victim to the vicissitudes of Goldman Sachs, etc., and the failure of Congress and the last two chief executives to regulate risky behavior.