Newt Gingrich Pushing Bill To Allow States To File Bankruptcy Allowing Them To Renege/Pensions...

Zero Hedge ^ | 10 Jan 2011 | Tyler Durden

[combat_boots]

Newt Gingrich Pushing Bill To Allow States To File Bankruptcy Allowing Them To Renege On Pension And Benefit Obligations

Submitted by Tyler Durden on 01/10/2011 09:48 -0500

Some unpleasant news for pensioned workers who believe that their insolvent state will be able to afford ridiculous legacy pensions in perpetuity. According to Pensions and Investment magazines, Newt Gingrich is pushing for legislation that will allow insolvent states to be taken off bailout support and file bankruptcy, in the process allowing them to renege on pension and other benefit obligations promises to state workers.

And if there is anything that will get government workers' blood pressure to critical levels, it is the threat that money they had taken for granted is about to be lifted, courtesy of living in an insolvent state (pretty much all of them). And obviously what this means for equity investors in assorted muni investments is that a complete wipe out is becoming a possibility, as Meredith Whitney's prediction, which everyone was quick to mock and ridicule, is about to come back with a vengeance.

From P&I:

[longtermmemmory]

you are not just saying because peole were doing. Hence the credit card companies mad dash to reduce credit to the peons.

debit cards are best for the logo creidits because they still chage for the use, chage for the atm fees, and NOW they are going to start to charge an annual fee for using YOUR OWN MONEY. (so VISA will charge the merchant and charge the consumer for using their card. In some places now they don’t even take cash)

[longtermmemmory]

no this is about revenue streams and chapter 9. Not 11 or 7.

You also are not taking into account the rampant corruption and fraud in union contracts.

[FreedomNotSafety]

proof reading is good, insert: Unions are NOT asking to become secure creditors.

[M. Dodge Thomas]

"This is excellent news and should be done."

Easy for you to say.

That's my 92 year old Mother's pension from a lifetime of teaching in IL you are taking about there.

[UnwashedPeasant]

We need Union Busters, like the old Trust Busters. They are a criminal cartel.

[upchuck]

Personally, I found the original article on the Pensions and Investments web site to be much more interesting than Mr. Durden's excerpt with comments.

I've noticed this a lot lately. Go to a Fox News story only to discover they have excerpted an article from somewhere else and stuck their comments on it. Are the journalists getting lazy?

[MSF BU]

Tell you what, the real solutions will probably involve caps. Overall pension payouts may be capped at 30K? 50K? You tell me. COLA may be capped at 4% per annum? Only occur once every two years? The numbers may change. I think we can both agree that before any pensions get cut we freeze public hiring and public wages, to include step increases...forget about it. Also, funding for frivolous nonsense goes away: Arts, Humanities, Departments of Croatian American Studies...all gone. Maybe a few state and community educational institutions as well: retain science, medicine, business, etc.