Friday, January 21, 2011

Plans being drawn up to let states declare bankruptcy

Chairman of the National Republican Senatorial Committee Sen. John Cornyn joins fellow GOP leaders for a news conference in the U.S. Capitol Jan. 6 in Washington, DC. (┬ęChip Somodevilla/Getty Images)

This is not good news for retired state workers. What happens to them when these states declare bankruptcy? What do you suppose that will do to the morale of current state workers?

Pensioners and investors in state bonds could lose out

“Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

PHOTO - Senator John Cornyn, a Texas Republican, has asked the Federal Reserve chairman, Ben Bernanke, about the possibility of drawing up a bill allowing states to go bankrupt

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