Analyst's note: We can all smell this issue brewing. Whatever is decided, the solutions will be brutal on the American citizens. Who will be held accountable? When will "We the People" demand that the basic cause be stopped?
As pointed out by Dr. Corsi, " [...] state governments, unlike the federal government, cannot simply print money." No ... printing more money is not a viable solution for state or federal government. Nor is "Obama's stash" a solution.
" [....] News reports indicate state policy makers, congressional leaders and officials in the Obama administration are already involved in behind-the-scenes discussions regarding whether declaring bankruptcy may be the only solution available to states with budget crises that cannot be resolved any other way.
[....] "Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care," Mary Williams Walsh wrote in the New York Times. "Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by congressional aides."
Corsi noted, "It is doubtful the federal government will bail out near-bankrupt states, despite the severe cutbacks in public welfare services the state budgetary crises are causing. Federal bailouts of the states would amount to nationalizing the states and could produce a constitutional crisis, especially if the federal government assumes as it usually assumes that the federal government has a right to control whatever the federal government pays for."
[....] Inevitably, states declaring bankruptcy could send major shocks through the municipal bond markets, with the unfortunate result that borrowing costs for all state and local governments may escalate dramatically, Corsi noted. [....]
