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State Bankruptcies

The new bail out plan?

State unfunded pensions, labor contracts, general obligation bonds – all unsecured debt? The former Speaker of the House is calling for a bill to support state bankruptcies. Should states be able to file bankruptcy?

They cannot right now because they are considered sovereign. Proponents of the bill however say that some states, including Kansas, are so financially bound state bankruptcies may be the only option.

Congress is currently tiptoeing around the subject. Although there is no draft of the bill, a dialogue has been started, so Public Workers beware.

Read more:

http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=1

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