Thirty Two states are Officially Bankrupt

Thirty Two states are Officially Bankrupt

darkbeaver

#1May 24th, 2010

Thirty-Two States are Now Officially Bankrupt
$37.8 Billion Borrowed From US Treasury To Fund Unemployment Insurance

--, May 23, 2010
-- - 2010-05-21

Courtesy of --we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance. The states in most dire condition, are, not unexpectedly, the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion). With this form of shadow bailout occurring, one can only wonder how many other shadow programs are currently in operation to fund states under the table with federal money.The full list of America's 32 insolvent states is below, sorted in order of bankruptedness.

California
$6,900
Michigan
3,900
New York
3,200
Penn.
3,000
Ohio
2,300
Illinois
2,200
N.C.
2,100
Indiana
1,700
New Jersey
1,700
Florida
1,600
Wisconsin
1,400
Texas
1,000
S.C.
886
Kentucky
795
Missouri
722
Connecticut
498
Minnesota
477
Georgia
416
Nevada
397
Mass.
387
Virginia
346
Arkansas
330
Alabama
283
Colorado
253
R.I.
225
Idaho
202
Maryland
133
Kansas
88
Vermont
33
S.D.
24
Tennessee
21
Virgin Islands
13
Delaware
12

captain morgan

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

You gotta wonder how the feds are financing this. The money has to come from somewhere.

darkbeaver

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

It comes from the bankers who steal it from the citizens.

Machjo

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

You gotta wonder how the feds are financing this. The money has to come from somewhere.

You can always print your way out of debt. That's how the Weimar Republic did it. But of course there is always a price to pay.

darkbeaver

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

When you're out of debt you're not playing ball with the internationalists. And if you're not playing they'll bomb you into a new game.

Spade

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

You gotta wonder how the feds are financing this. The money has to come from somewhere.

It is "printed." Well, actually an electronic creation.

Machjo

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by Spade

It is "printed." Well, actually an electronic creation.

Print, print, print your way quickly out of debt.
Inflation, inflation, inflation, inflation is sure not to let.

taxslave

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Looks like a win win for the rich.

Spade

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Steps to create "wealth."

1. Deficit finance
2. Print money
3. Raise interest rates when inflation as a result of step 2 occurs
4. Increased rates encourage investors to buy government bonds
5. Repeat Step 1.

Machjo

#10

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by taxslave

Looks like a win win for the rich.

Inflation is very much a regressive tax since the rich can hedge, the poor have nothing to hedge, so they're the ones who really get beaten up with inflation.

Same with high interest rates. The rich lend at higher rates and the poor pay at higher rates.

It's ironic that it's usually the left, you know, those who are so concerned about the well-being of the poor, who support inflation.

Though granted at least the left is honest about it. The right pretends to oppose inflation and still causes it.

captain morgan

#11

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by Machjo

Print, print, print your way quickly out of debt.
Inflation, inflation, inflation, inflation is sure not to let.

So, what do you plan to do with all this money after you print it?

Machjo

#12

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

So, what do you plan to do with all this money after you print it?

Spend it of course... on gold. You can live with the resulting inflation.

My printing machine's revving up as I type.

taxslave

#13

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

So, what do you plan to do with all this money after you print it?

A$$ wipe? Has about the same value and not as slippery as the Sears catalog.

Machjo

#14

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Hmmm... just to throw another fun conspiracy theory out there:

Maybe the Taliban is printing US dollars to fund its attacks on the US, which would mean the US is unwittingly funding the Taliban.

Actually, that would be a brilliant tactic as it would kill two birds with one stone: it would provide funding for the Taliban while watering down US purchasing power which would mean a weaker ability to fund its military.

Honestly, if the Taliban is not involved in this already after all these years, then it really is a stupid force to reckon with.

If I were the Taliban, I'd be printing US dollars, British pounds, Canadian dollars, any money my enemy produces.

captain morgan

#15

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by Machjo

Spend it of course... on gold. You can live with the resulting inflation.

My printing machine's revving up as I type.

Gold, eh?

Considering that each nations keeps a careful eye on their own (and others) money supply, your scenario will not happen.

You brought up the Weimar Republic. You heard the tales of needing a sack of cash to buy a loaf of bread. Does it really make sense to you that a government can print up billions or trillions of money and no one will notice?

Quote: Originally Posted by Machjo

Hmmm... just to throw another fun conspiracy theory out there:

Maybe the Taliban is printing US dollars to fund its attacks on the US, which would mean the US is unwittingly funding the Taliban.

Actually, that would be a brilliant tactic as it would kill two birds with one stone: it would provide funding for the Taliban while watering down US purchasing power which would mean a weaker ability to fund its military.

The Nazis tried doing that with Brit Pounds Sterling... It almost worked.

Machjo

#16

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

Gold, eh?

Considering that each nations keeps a careful eye on their own (and others) money supply, your scenario will not happen.

You brought up the Weimar Republic. You heard the tales of needing a sack of cash to buy a loaf of bread. Does it really make sense to you that a government can print up billions or trillions of money and no one will notice?

The Nazis tried doing that with Brit Pounds Sterling... It almost worked.

Hey, look at it this way:

If the government has a debt of one trillion dollars, then to inflate the currency until the minimum wage is one million dollars an hour, suddenly our debt ain't so big anymore... though of course there may be fear of revolution or civil war, but that's a minor issue, really

petros

#17

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

You gotta wonder how the feds are financing this. The money has to come from somewhere.

Print it out at will since it's fiat money, then kick back watch prices skyrocket from the inflated monetary system and call it " economic growth" until consumer prices go nuts and everyone is broke from buying a pack of balogna and a loaf of bread.

Machjo

#18

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

But now if I'm the only one printing the money, I'd be rich long before inflation would really be out of control. But no worries, I'd have inflation soaring within a year.

captain morgan

#19

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by taxslave

A$$ wipe? Has about the same value and not as slippery as the Sears catalog.

Ouch! (figuratively and literally)

petros

#20

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Beats a pine cone

captain morgan

#21

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by Machjo

Hey, look at it this way:

If the government has a debt of one trillion dollars, then to inflate the currency until the minimum wage is one million dollars an hour, suddenly our debt ain't so big anymore... though of course there may be fear of revolution or civil war, but that's a minor issue, really

Zimbabwe tried that, it didn't work worth a damn.

What you really want to do is the opposite... Deflate the value of your dollar and pay as much debt as possible with a lower dollar.

petros

#22

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Or high interest.

VanIsle

#23

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by taxslave

Looks like a win win for the rich.

Maybe it's time we swooped up Florida by paying it's debts and call it a part of Canada!!!

Machjo

#24

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

Zimbabwe tried that, it didn't work worth a damn.

What you really want to do is the opposite... Deflate the value of your dollar and pay as much debt as possible with a lower dollar.

Deflation is just as harmful since then you're pushing the value of the debt up. In fact, looking at it that way, inflation is a good thing since it pushes the value of the debt down.

That said, I'm still opposed to inflation owing to other factors, whereby it essentially just replaces one problem with another. While deflation is certainly preferable to inflation, 0 inflation is best as much as possible.

Quote: Originally Posted by VanIsle

Maybe it's time we swooped up Florida by paying it's debts and call it a part of Canada!!!

After the gas leak, hell no.

Washington State on the other hand does have a nice mild climate.

darkbeaver

#25

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Paying off the national debt is a sure way to get a banker bought bullet in the head.

captain morgan

#26

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by Machjo

Deflation is just as harmful since then you're pushing the value of the debt up. In fact, looking at it that way, inflation is a good thing since it pushes the value of the debt down.

I think you have it backwards - kinda. The value of your debt remains the same. If you owe $100 at 5%, it is still $100 @ 5% regardless of of the currency fluctuations. Assuming that 1USD = 1CDN, if the Americans were to devalue their currency to 0.50, where 1USD would buy $0.50 Canadian, the Americans could in fact sell commodities like gold that are traded in USD and get more "paper" for that gold.

In this scenario, 2 things would happen if the US devalued their dollar:

The value of the USD will decrease relative to Canadian dollars (among others).
The (relative) value of gold would go up because it will take more (devalued) USD's to buy an ounce of gold and gold is traded in USD.

The Americans could sell-off their gold reserves (or a portion) and artificially get more money for that gold. The feds then pay for that 100 USD debt from the proceeds... In the end, because the US devalued their dollar, (where 1 USD = 0.50 CDN), they debt (settled in USD's) was 1/2 of the relative original amount.

There are more issues at hand than just this, but perhaps this gives you a picture of what's possible.

darkbeaver

#27

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

The bet is that the Americans have no gold reserve.

Machjo

#28

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Quote: Originally Posted by captain morgan

I think you have it backwards - kinda. The value of your debt remains the same. If you owe $100 at 5%, it is still $100 @ 5% regardless of of the currency fluctuations. Assuming that 1USD = 1CDN, if the Americans were to devalue their currency to 0.50, where 1USD would buy $0.50 Canadian, the Americans could in fact sell commodities like gold that are traded in USD and get more "paper" for that gold.

In this scenario, 2 things would happen if the US devalued their dollar:

The value of the USD will decrease relative to Canadian dollars (among others).

The (relative) value of gold would go up because it will take more (devalued) USD's to buy an ounce of gold and gold is traded in USD.

The Americans could sell-off their gold reserves (or a portion) and artificially get more money for that gold. The feds then pay for that 100 USD debt from the proceeds... In the end, because the US devalued their dollar, (where 1 USD = 0.50 CDN), they debt (settled in USD's) was 1/2 of the relative original amount.

There are more issues at hand than just this, but perhaps this gives you a picture of what's possible.

That depends on the denominaiton of the debt. If the debt is in USD and you deflate the USD, then the actual value of the debt in USD drops. If the debt is in CAD and you devalue the USD, then that debt is unaffected by the devaluation since it's not in USD anyway. So it really depends.

However, even if the debt is in your own currency, it's still not wise to deflate since that will push interest rates up too, so while the money already owed might shrink, you may find yourself in a position to have to borrow more money, or at least find yourself cash strapped when no one wants to buy your money anyore.

AnnaG

#29

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

Isn't the cycle peachy? Who suffers? The majority of people. Aren't plutarchies wonderful?

The Old Medic

#30

Re: Thirty Two states are Officially Bankrupt

May 24th, 2010

No state is, or has been, "Officially Bankrupt". The US Federal Government has, since the 1930's, provided a great deal of money to the various states. They are not obligated to pay it back, it is comprised of tax money that the Federal Government has taken from the citizens of those states.

Wake up and learn some reality.

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