Nathan B. Oman: Hiding state's debt doesn't make it any less real

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  • Howard Beal Provo, UT
    Nov. 22, 2012 8:11 a.m.

    I'm not sure where state governments get their money but city/local governments borrow money from big banks and other creditors much like individuals and corporations. Then they can't make their payments. These entities refuse to loan more money and these cities are in trouble, again not unlike what we would go through if we maxed out our credit cards. Just ask Stockton, CA or Scranton, PA and many other cities are at risk of filing for bankruptcy. This, along with the student loan bubble, is about to burst. Thankfully, Utah cities are generally avoiding this fate. As for state governments, I don't think they can just print money like the feds can so they are probably in the same boat. So if I was in California, look out. Your cities are going belly under and the state is heading that direction to. I'm not sure if the federal government, led by President, can stop the bleeding or bail these cities/states out. "There will be blood" as the saying goes. AUSTERITY-the new word for this generation.

  • Twin Lights Louisville, KY
    Nov. 21, 2012 9:52 p.m.

    If the state is a sovereign entity, how can it declare bankruptcy? Who is the sovereign that can order that creditors forgive the state's debt? If the federal govt, then does this not further weaken state independence from the federal center (making the states really just provinces of a national govt)? Be careful what you ask for.

    The states are suffering from ignoring the very clear warnings which most had for decades. Do not pity them too much.