A Tsunami Approaches: The Beginning of the Great Deconstruction | Newgeography.com

A Tsunami Approaches: The Beginning of the Great Deconstruction | Newgeography.com: "-

H/T Wretched at belmontclub.

This article hints at only one of the great Ponzi schemes running through government today: pensions.

Let's not forget about government-guaranteed, highly inflated student loans; Social Security; Medicaid; union healthcare promises.

When states start going into default, it may be too late to correct these government problems at the state level the right way: using the Bankruptcy Code.

Bankruptcy refers to the medieval practice of money changers sitting on benches called "banca" (Latin, Italian) or "banque" (French). When the money changer became insolvent the banker's guild would supposedly break the insolvent money changer's bench. The word for broken was "rupta" (Latin), "rota" (Italian), or "route" (French). The money changer would be banca rupta, banca rota, or banqueroute, respectively.

In modern practice, a person is not collaqu0lly referred to as bankrupt until he files for bankruptcy proceedings. In historic origins, though, a person was technically bankrupt when he was insolvent, that is his current liabilities exceeded his current revenues with little disposable assets to bridge the gap.

The fact is that the States are tending toward this insolvency definition of bankrupt. They don't have enough revenue to meet their current expenses. The problem is that no Chapter of the Bankruptcy Code allows the State to seek the protection of the Bankruptcy Court to reorganize the State's debts.

GM could strip itself of its liabilities to the UAW in part through bankruptcy. Currently, the States have no ability to do the same thing.

Politicians can't do what is necessary to fix their problems. Their best solution is to pass the consequences of their carelessness to federal politicians.