Posted by: thescoundrel | July 6, 2010

Illinois – Bankruptcy or Burst


I am not a fan of current Illinois Governor Pat Quinn. In my opinion –> he is just part of the decades old tax and spend anti-business political nanny-state system, that has created the mess that has Illinois in the financial crisis it currently faces. I think he talks a big game about fixing the current Illinois financial crisis –  but it is all talk, because he lacks the Viagra needed to fix his impotency. Over on Quadsville – Kurt Erickson posted on the financial-fix blockades Illinois faces.  The State has way too  many financial legal obligations – Quinn cannot actually address. And as much as I find Quinn sorely lacking the needed virility to fix the Illinois financial crisis – I tend to agree with Erickson’s statement :

In other words, Quinn is handcuffed. He really doesn’t have that much wiggle room.

That’s not an excuse. That’s just reality.

Quinn, as well as any other politician option, is basically impotent to fight the current financial disaster created by past and present Illinois politicians. Perhaps it is time to seek a solution that would uncuff the State of Illinois from the budget crisis. The State of Illinois is way past  claiming it is financially over-extended. One huge problem is that we have way too many expenditures going towards government employee salary and especially their bloated pensions. And we are legally bound to them. When a business gets overextended they seek refuge through some form of  bankruptcy. It is messy and a nasty business but it allows them the opportunity to renegotiate legally binding financial situations and contracts that have them in a bind. Perhaps it is time that the State of Illinois started considering what bankruptcy options they have available, as a way to help  fix 13 billion-dollar budget gap, especially through bankruptcy renegotiation of  their bloated government salary and pension obligati0ns.It might be the only real option Illinois has before it bursts apart at the financial seams!


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Responses

  1. Since states can’t declare bankruptcy, it looks like our only alternative is for our brave and principled elected officials to repeal all those bad laws requiring unsustainable $$$$ being tossed to public employees.

    OK, just joking. 🙂

  2. That is the problem in a nutshell. They are legally bound by contracts to pay funds they have no possible way of honoring. I am unsure how correct it is but I read somewhere that only municipalities have the right to declare bankruptcy. And that a State can only choose to raise taxes, layoff people or choose to default payment. It’s a catch 22 situation. No matter what path the State chooses they are doomed to fail. Illinoisans have constantly shown there unwillingness to raise taxes. I am with that crowd. I also believe Quinn and the rest of the politicians understand if they raise taxes enough to fix the problem – this state becomes a ghost-state mostly composed of government workers and sanctuary cities for illegal immigrants. The courts have ruled against Quinn when he tried to layoff people. That leaves few options – default payments. That would cripple the state leaving them without absolutely any purchasing power needed for day-to-day business. Thus leaving them the only the option of going all Hugo Chavez – on any business left in the state in order to function anywhere nears normalcy. Hence another path towards a ghost state. They could wait for Mr Hope-and-Change, whom helped create this problem to use federal money to bail the State out. That problem is Mr. Hope-and-Change is busy trying to bankrupt the nation in the same manner he helped bankrupt Illinois.

    Any path they choose -except the hope of a fairy tale federal bailout- leads towards bankruptcy. The only insane sane-option left is to put all those crooked lawyer minds together and find a way to simulate a bankruptcy proceeding for the State. Their is no way for the State to win on this unless they find a way to declare or at least simulate bankruptcy.


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