Tuesday, August 04, 2009

Solution for Illinois | Bankruptcy?

Washington Park, a small town of 5,500 people in southwest Illinois, has filed for Chapter 9 bankruptcy protection, saying it has assets of less than $50,000 and debts exceeding $1 million.

Under bankruptcy law, a government entity can seek protection under Chapter 9.

So, with estimates of $7 to $11 billion of debt for the State of Illinois, instead of massive tax increases, why not just declare bankruptcy?

The "shame" shouldn't be a factor. After all, Illinois leads the nation in corruption from Chicago's City Hall to the state capitol in Springfield with figures from Chicago Mayor Daley to former Illinois Gov. Rod Blagojevich.

And, like in most bankruptcy situations, any further wild spending would be stopped or require court approval.

9 comments:

Leonard said...

So if a municipality (municipal corporation), you know corporate government, files a petition in Chapter 9 Bankruptcy what do we have and what are some unintended consequences?

1. Recognition that the city corporate structure has no value actually negative value.
2. Potential termination of contracts for city services including employees.
3. Potential loss of all city services.
4. Further loss of property values as who in their right mind is going to want to move there?
5. The takeover of the municipality by a federal judge.
6. Such takeover means that the federal government now directly controls that city and its future.
7. A court mandated tax hike in order to pay for the plan so city services can be maintained.

The first thing that should happen is that every person in that town should resign from office and the residents should be going after them for malfeasance and any other cause of action applicable to the inept operations of the city.

Yes look to bankruptcy if you want the federal government citing in city hall and if you do then look to prosecute the geniuses holding office and the genius bureaucrats. This event did not just happen. Someone or some people ran the city into the ground.

Maybe this is just what we need, the truth to come out that those geniuses are, in fact inept, incompetent boobs that cannot run anything.

The private taxpayer has run out of money. There is nothing left to give but do we see our so-called government recognize this? No hardly. May now is the time to stop the gravy train.

Other so-called governments should take a close hard look at this and look very closely into the mirror and stop the bull and start looking out for the taxpayer for a change.

Does anyone expect that to happen?

Anonymous said...

Leonard, how can a judge mandate a tax increase that does not go through a legislative process of popular representation?

Any thoughts?

Anonymous said...

uh, Openline IL pension debt alone is 45.6 billion and grows $121 per second...

So it is far greater than 7-11 billion...just the pension debt is over or a bit over 3,300 per person. So if you are married and have 2 children your share of just pension debt is a bit over 13,200.

Leonard said...

It is not unreasonable that the plan approved by the court to work the city out of bankrupcty would include a tax increase. The approval of such a plan places the city in the position of being required to pass a tax increase.

Keep in mind that the city is a corporation first and wants to survive first.

Judges issue orders commanding people to do things every day. Why would this be any different?

If there is an expert at Chapter 9 Bankruptcy chime in and I will yield to that expertise.

Leonard said...

"Keynesian Economics" is what has gotten us to this point. Here is John Keynes circa 1919. Note at that time there was still real money in circulation, unlike today.

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic laws on the side of destruction, and does it in a manner which not one in a million is able to diagnose.”

John Maynard Keynes
Economist, Member of the Order of Illuminati
The Economic Consequences of Peace, 1919

Anonymous said...

Leonard:

Judges issue orders commanding people to do things every day. Why would this be any different?

Judges commanding individuals are one thing, the difference would be in terms of tax increase. If the city agreed to pass the tax increase I believe that would be lawful, but I am not sure a Judge could increase taxes by bypassing the legislature, i.e. the city council and mayor. I think there has to be popular representation via the equivalent of the city council for a tax increase.

Leonard said...

I think that I am on record here as being opposed to unrestricted “government” power. I think we will have to agree to disagree.

The corporation called a city is essentially just another corporate entity which in this case volunteered to turn itself over to the federal court. I suggest to you that if a reorganization plan is worked out and in order to fulfill the plan additional tax revenue is required the council will be obligated to pass a tax increase. To do otherwise after the plan is approved would be a violation of the plan in contravention of the court order that approved the plan. I doubt if any council member will be willing to run up against that.

Thus court ordered tax increases.

Anonymous said...

Thanks for the explanation Leonard.

Anonymous said...

I am waiting for this City to declare bankruptcy.