Dr. Martin Hash Podcast

Bankruptcy is in the U.S. Constitution for a very important reason, to let people start over again after bad judgment or bad luck put them into a position they can't realistically come back from. Cities need to declare bankruptcy for the same reason. However, some State governments are so captured by Public Employee unions that they've made it illegal to go bankrupt, or to even to modify pensions. Those States need to be allowed to totally crash, not get bailed out by the Feds, so that eventually the vested interests in charge get thrown out, and their laws get changed so that they can declare bankruptcy. Private citizens NOT responsible for generous public pensions of bankrupt municipalities. After a city goes bankrupt, whatever the Pension Guarantee Corp decides is reasonable & sustainable is what retired public employees get, the same as for bankrupt private pensions.

Also, cities should not be able to obligate their taxpayers to long term bonds, all projects should be pay-as-you-go special levies, no longer than 5 years, the median duration of citizen's residency. Cities get into financial trouble because elected officials who borrow the money actually have no responsibility for repaying it, and no penalty if they don't: all gain, no pain. Maybe only the U.S. Supreme Court is going to be able to break the public employee stranglehold on municipal bankruptcy so that innocent private taxpayers are relieved from onerous public obligations, but without bankruptcy relief, productive citizens will vote with their feet, especially when service is declining and the environment is hostile, leaving only those who consume more than they produce in the bankrupt cities.