Jon Greenspon / January 31, 2011

Bankrupting America – One State at a Time

Recently, there has been a lot of talk regarding the bankrupting of the states. Here’s a straightforward way to deal with this eventuality, since our Congress has helped put the states in this position through excessive regulation and mandate.

In a simple word, I think it’s a fair solution, although not a very wise one, as one state going bankrupt will, by necessity, cause the potential bankrupting of other states. That said, let’s look at the “best case scenario” should this become necessary.

First, This is NOT going to be a “simple bankruptcy.” Unlike the current White House Administration’s destruction of the free market system, as demonstrated by the takeover and “reorganization” of Chrysler and General Motors, the United States Government will get NO controlling interest in the reorganized state. In this case, only those with a vested interest in the affairs of the state (i.e. the citizens of the state) will get a say. Second, this is not a case for the United States Bankruptcy Court, this should be determined at the United States Supreme Court level – so it can be recognized as an EXTREME measure, not a casual affair, as many personal and business bankruptcy reorganizations can be. The Court either says yea or nay, there’s no landmark rulings here.

If a nay passes down, then the state needs to look to some definitive budget reductions, up to and INCLUDING eliminating Federally mandated items that it can’t afford. If Washington is going to require funding of programs, then let them fund the programs.

However, if the Supreme Court grants the “Bankruptcy”, here’s what should happen. This is both fair and equitable to the citizens of the state, and as best as possible, fair to states holding debt in their bankrupted partner’s name.

Starting with the State’s authority, all state level elected officials (executive and legislative) should be “fired.” Realistically, they should be relieved of their positions without any future compensation (bye-bye pensions) and prohibited from holding ANY elected position in, or for the state permanently. Whichever party held the governorship, it should convert to another dually authorized party within that state. In California, for example, where the current Governor is from the Democratic Party, a random drawing by the Chief Justice of the Supreme Court would determine which of the other remaining five parties shall elect a transitional governor; a similar drawing shall be held for each of the remaining elected executive officers. At the Legislative level, a drawing shall be made for the first house seat, and for the first senate seat. From that point on, a rotation should be made with the inclusion of an “independent” or non-recognized party seat for each district, until all seats are provided for. This would ensure that all representative groups, including “decline to state” are provided for. This new elected body would serve, as part-time legislators, until the next REGULAR election cycle.

As far as the state budget, the new legislature would enact a budget based upon the state’s budget of 7 years prior, with some simple stipulations. First, all union contracts WILL be renegotiated, except in states where the “right to work” provision exists. There will be no union forming at government level in such states, and any “government employee unions” will be declared non-recognized for a period of 10 years. Second, the state will be mandated to adopt straightforward budgeting until the next regular election cycle. They would be required to abide by the following budget: 1.5% of the state budget shall go to the State Pension program, funding only those who are over 60, veteran programs, or retired due to sickness or disability; 14% shall be provided to state healthcare, with the goal being to provide basic Medicaid services, well-child services and to reopen closed hospitals and clinics; 34% shall be provided to the state education system, with the restriction being that none of the monies go to scholarships, research or salaries in excess 67% of the national average for a given position – without tenure; 10% of the budget will be allotted to the state welfare program, and only for American citizens who have been on the program for less than an automatic cutoff of 48 months – there should be no benefits for non-citizens in any form, under this restructuring; 7% of the budget should be directed to state essential protection services, courts and state prisons; 12% for transportation and infrastructure support; and 1% to pay for general government operations – such as government building maintenance, equipment and part-time legislators and staff pay. The executive officer salaries shall be placed at 75% of the LOWEST current salary for equal state official positions and shall remain at that level until raised by a 70% popular vote. All legislator salaries shall be set to equal an average of the 25 lowest part-time legislative states, without any extra daily allowances.

The last two items for the budget consist of a 5.5% “savings” account, to provide the state with a safety in case of an unforeseen emergency; and most importantly, a 15% section of the budget to be fairly paid out to its sister states. This item will remain in place for 15 years, or until its obligations are met – whichever comes first.

As you can see, this is not a “best case strategy,” but then again neither is bankrupting your state. While it’s time for Washington to start looking to shave dollars, it can’t hurt the state’s to try finding ways to shave pennies too.

Jon Greenspon is a conservative candidate for the 2012 Presidential election. A registered Republican, Jon is originally from Los Angeles, and now resides in the State of Montana.

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