Survivalist Forum

Advertise Here

Go Back   Survivalist Forum > Survival & Preparedness Forum > Financial Forum
Articles Chat Room Classifieds Donations Gallery Groups Links Store Survival Files



Financial Forum Economics and Precious Metals

Advertise Here
Reply
 
Thread Tools Display Modes
Old 09-20-2010, 01:30 PM
countryboy123's Avatar
countryboy123 countryboy123 is offline
Scarred for life...
 
Join Date: Feb 2008
Posts: 3,295
Thanks: 1,796
Thanked 5,216 Times in 1,566 Posts
Default When do the states go bankrupt?



Advertise Here

I keep hearing little snippets of how California, Illinois, New York, etc are close to bankruptcy.

Can anyone enlighten me on how and when that could happen?

Are these states being propped up until after the election or is the bankruptcy talk overblown?

It seems to me they are just happily spending like they always do and will just issue IOU's forever.
Old 09-20-2010, 01:50 PM
aramchek's Avatar
aramchek aramchek is offline
Prepared
 
Join Date: Dec 2008
Location: Minnesota
Posts: 11,540
Thanks: 1,123
Thanked 12,631 Times in 5,889 Posts
Default

Could be that bankruptcy is just a mechanism to control people, framing it as raise taxes and/or cut services, get more out of them without giving them anything more in return. Financial doom-and-gloom notwithstanding, human productivity, agricultural techniques, manufacturing, transportation, communications, etc. are still light-years ahead of anything humanity new in the past. Either these bankruptcies are largely over-hyped as a control mechanism, or else they're quite real -- and we ought to wonder what the heck elected officials are thinking. I bet it's about 50/50.

For the portion that's real, the upshot is fairly clear. The more mismanaged states are being propped up by the more sensible states, at the federal level. So long as Uncle Sam keeps redistributing from the better states to the worse, there's little incentive for the poorly-administered states to get their acts together.
Old 09-20-2010, 02:01 PM
anne36's Avatar
anne36 anne36 is offline
Survivor
 
Join Date: Feb 2008
Location: Michigan
Posts: 2,913
Thanks: 4,577
Thanked 2,718 Times in 1,262 Posts
Default

The states must have spent more money than they had to begin with in previous years. If they are brining in tax dollars they will never really go broke. This recession might be a good way to shrink government down to a reasonable level.
Old 09-20-2010, 02:06 PM
crankyfarmer's Avatar
crankyfarmer crankyfarmer is offline
Grand Poobah of Sarcasm
 
Join Date: Dec 2007
Location: Beautiful Montana
Posts: 3,078
Thanks: 751
Thanked 4,848 Times in 1,545 Posts
Default

Montana is still in the black because by law we have to have a balanced budget. Perhaps some of the other states should try that. Heck, the feds should do that too.
The Following 5 Users Say Thank You to crankyfarmer For This Useful Post:
Old 09-20-2010, 02:06 PM
WSierra's Avatar
WSierra WSierra is offline
RESET CONGRESS!!
 
Join Date: Dec 2008
Location: Midwest
Posts: 9,465
Thanks: 13,489
Thanked 12,413 Times in 4,749 Posts
Default

States are certainly different than you and I.
WE,... would be bankrupt.
California.. unless it is williing to sell off state assets, is bankrupt.
I don't get it either. Who/what is keeping them afloat?
Thay cannot print money.. how are they meeting their obligations at all?
Help me here.
Old 09-20-2010, 02:46 PM
556X45's Avatar
556X45 556X45 is offline
Nemo Me Impune Lacessit
 
Join Date: Aug 2010
Location: Utah
Posts: 6,739
Thanks: 22,926
Thanked 10,314 Times in 4,418 Posts
Default

Quote:
Originally Posted by WSierra View Post
States are certainly different than you and I.
WE,... would be bankrupt.
California.. unless it is williing to sell off state assets, is bankrupt.
I don't get it either. Who/what is keeping them afloat?
Thay cannot print money.. how are they meeting their obligations at all?
Help me here.
I thought Ca. was doing an IOU thing. maybe I'm wrong would not be the first time.
Old 09-20-2010, 02:53 PM
aramchek's Avatar
aramchek aramchek is offline
Prepared
 
Join Date: Dec 2008
Location: Minnesota
Posts: 11,540
Thanks: 1,123
Thanked 12,631 Times in 5,889 Posts
Default

CA has more millionaires in Los Angeles County than anywhere in the US. Selling off public assets -- while there's so much wealth in CA -- is all part of the game.
Old 09-20-2010, 02:56 PM
OldSchool's Avatar
OldSchool OldSchool is offline
VIP Member
 
Join Date: Oct 2009
Location: North West Arkansas
Posts: 689
Thanks: 643
Thanked 992 Times in 372 Posts
Default

As soon as they can no longer fund basic services (trash, water, prisons, etc.) At that point they appeal to the Feds, who will print to cover them. So in summary, never.
Old 09-20-2010, 03:55 PM
seawind seawind is offline
Survivor
 
Join Date: Sep 2009
Posts: 2,905
Thanks: 6,994
Thanked 4,360 Times in 1,577 Posts
Default

Off the wall question. Could the Fed be buying state Bonds ?? Any large state going under is going to be bad news as far as Federal bonds. Can the Federal government "afford" to let a state go bankrupt.
Old 09-20-2010, 03:59 PM
d3athp3nguin's Avatar
d3athp3nguin d3athp3nguin is offline
AAAH GET TO ZE CHOPPA!
 
Join Date: Jul 2008
Location: East Coast
Posts: 1,521
Thanks: 172
Thanked 1,323 Times in 699 Posts
Default

States can do a lot of "Creative accounting" to move money around and keep the budgets going. It's more of a delaying tactic than anything else; eventually they just have to cut services. In California the reason they were handing out IOUs is that they were in stalemates about approving a new budget. They don't necessarily have to have the money; they just have to agree what they are going to spend and whether it will be deficit spending.

I think with bigger entities like States or the FedGov, there is also a sense of "too big to fail" in that everyone assumes that the Government will pay their debts. They are the ones responsible for handing out welfare, after all. That's why you always hear of people trying to go fo a "cushy government job": less accountability and you're the last one to face layoffs or pay reductions.
Old 09-20-2010, 04:56 PM
methemom's Avatar
methemom methemom is offline
Survivor
 
Join Date: Feb 2010
Location: northern mi
Posts: 3,593
Thanks: 5,569
Thanked 3,453 Times in 1,670 Posts
Default

Illinois is borrowing billions and paying millions in extra interest rates because they are a bad risk. they are getting farther behind in their payments = used to be a month or two for most, now up to 6-9 months. they are talking about raising income taxes by 33 percent... towns and cities are all raising taxes and fees. this is pretty ugly, and i don't see it fixing itself quickly, even if we do get a conservative governor in the coming elections. when it comes time to slash spending and make a balanced budget there will be too many hands out and too many promises to keep. business as usual. I hate this state.
Old 09-20-2010, 06:01 PM
iNGEN's Avatar
iNGEN iNGEN is offline
Surviving selling labor
 
Join Date: Jul 2010
Location: Midwest
Posts: 554
Thanks: 918
Thanked 496 Times in 253 Posts
Default

Governments don't really bankrupt. When they are totally insolvent they monetize debt until societal collapse or, if unable to monetize debt, they are absorbed by a solvent government.
The Following User Says Thank You to iNGEN For This Useful Post:
Old 09-20-2010, 07:20 PM
Melting's Avatar
Melting Melting is offline
Trapper
 
Join Date: Aug 2009
Posts: 983
Thanks: 1,196
Thanked 1,230 Times in 503 Posts
Default

Quote:
Originally Posted by OldSchool View Post
As soon as they can no longer fund basic services (trash, water, prisons, etc.) At that point they appeal to the Feds, who will print to cover them. So in summary, never.
Absolutely correct

(Hey, you stole my reply)
Old 09-20-2010, 07:38 PM
PrepperCon PrepperCon is offline
Hiker
 
Join Date: Jun 2009
Location: Washington State
Posts: 668
Thanks: 497
Thanked 753 Times in 343 Posts
Default

Quote:
Originally Posted by crankyfarmer View Post
Montana is still in the black because by law we have to have a balanced budget. Perhaps some of the other states should try that. Heck, the feds should do that too.
Ca. definitely has a constitution requiring balanced budgets. You can see how effective an actual law is when liberals are in charge of the spending.

To them, if they spend too much, the citizens will just have to make up the difference and pay higher fees, taxes, etc.

I am convinced that government, not having any idea of how to actually MAKE money like a business has to through sales of services, product, or whatever, has no clue about finance. Their biggest problems seem to be figuring out myriad ways to spend money. They think money grows on trees, literally.

So, I would imagine most of our states have a balanced budget law, if not all. It's the FEDs who don't have this particular little spending restraint.
The Following User Says Thank You to PrepperCon For This Useful Post:
Old 09-20-2010, 08:10 PM
seawind seawind is offline
Survivor
 
Join Date: Sep 2009
Posts: 2,905
Thanks: 6,994
Thanked 4,360 Times in 1,577 Posts
Default

Quote:
Originally Posted by methemom View Post
Illinois is borrowing billions and paying millions in extra interest rates because they are a bad risk. they are getting farther behind in their payments = used to be a month or two for most, now up to 6-9 months. they are talking about raising income taxes by 33 percent... towns and cities are all raising taxes and fees. this is pretty ugly, and i don't see it fixing itself quickly, even if we do get a conservative governor in the coming elections. when it comes time to slash spending and make a balanced budget there will be too many hands out and too many promises to keep. business as usual. I hate this state.
At some point business and those who can just move. The way things are now there are many cities, and counties that wave all or almost all taxes (local) in order to get a business to relocate. Blue states will get way worse then collapse. Get out if you can.(while you still have any $$ at all)
The Following User Says Thank You to seawind For This Useful Post:
Old 09-20-2010, 09:03 PM
countryboy123's Avatar
countryboy123 countryboy123 is offline
Scarred for life...
 
Join Date: Feb 2008
Posts: 3,295
Thanks: 1,796
Thanked 5,216 Times in 1,566 Posts
Default

Perhaps the companies that are accepting the IOU's as part of the cost of doing business with the state must go bankrupt first?

I suppose at some point these businesses have to say "no more" before the state resorts to threats first and when that doesn't work, bankruptcy?
Old 09-20-2010, 09:10 PM
Baddogg5 Baddogg5 is offline
This is a great survival forum
 
Join Date: May 2010
Location: Northern California
Age: 55
Posts: 6,749
Thanks: 6,695
Thanked 11,635 Times in 4,109 Posts
Default

America went broke the second we got China to buy our Debt
Old 09-20-2010, 09:46 PM
aramchek's Avatar
aramchek aramchek is offline
Prepared
 
Join Date: Dec 2008
Location: Minnesota
Posts: 11,540
Thanks: 1,123
Thanked 12,631 Times in 5,889 Posts
Default

We started going broke in the 1960's-72's when a conspiracy assassinated the US president but the next administration didn't come clean on it, we left the Gold Standard, Nixon cozied up to the Chinese, fractional reserve banking, off-shoring our industry, and digital money. Far too many playgrounds for the unscrupulous to operate in.

Quote:
Originally Posted by Baddogg5 View Post
America went broke the second we got China to buy our Debt
Old 09-21-2010, 05:57 AM
methemom's Avatar
methemom methemom is offline
Survivor
 
Join Date: Feb 2010
Location: northern mi
Posts: 3,593
Thanks: 5,569
Thanked 3,453 Times in 1,670 Posts
Default

Quote:
Originally Posted by seawind View Post
At some point business and those who can just move. The way things are now there are many cities, and counties that wave all or almost all taxes (local) in order to get a business to relocate. Blue states will get way worse then collapse. Get out if you can.(while you still have any $$ at all)
unfortunately the only way to get out is to run from my responsibilities and moral obligations,( get a divorce and abandon my family), which i will not do, so we are stuck here. if i were doing the choosing we would have been gone a long time ago.
businesses have been bailing from Illinois for years. More leaving all the time.
this state can not continue with business as usual much longer. I vote Illinois as the first domino, with Ca right on our heels...
The Following User Says Thank You to methemom For This Useful Post:
Reply

Bookmarks



Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Is the FDIC going bankrupt? prepperintraining General Discussion 7 09-21-2010 11:17 AM
California bankrupt...again! SCUBADIVINGJOE Disaster Preparedness General Discussion 18 06-23-2010 04:16 PM
Map of the states - that Lets you see where/what your reciprocal states are NHCraigT Firearms General Discussion 9 04-01-2010 11:57 PM
The United States has been Bankrupt since 1936 - Hence, Social Security END_GAME Controversial News and Alternative Politics 2 06-27-2009 02:17 AM
Is the USA bankrupt? Pixelguy Controversial News and Alternative Politics 31 02-17-2009 05:16 PM


All times are GMT -5. The time now is 11:01 PM.


Powered by vBulletin®
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
Copyright Kevin Felts 2006 - 2012,
Green theme by http://www.themesbydesign.net