Thursday, April 23, 2020

The states decide by vote

States Should Not Receive Bankruptcy Protection

There is no state vote that can declare bankruptcy since the vote itself is a decision to cut spending to sustainable levels. A state cannot vote to default onto the Federal government neither.  Newsom cannot, on his wn, specify that state law be rescinded, and this is what is happening now. The school districts are asking for a moratorium on pension payment increase.  Newsom has no authority to do this unless voted by the legislature, otherwise the unions sue and the State Supremes will rule for the unions.

This is Kevin Williamson, enlightening us for once.

The system was designed for instability to protect the federal government from autocracy.  In particular, this rules out special municipal subsidies since these municapiltes reflect economies of scale in the states. 

This is also why Krugman went to yapping and gave up on economics, there is no observable adaption process for state boundaries and so agglomeration theory fails. But, into the picture steps I, with claims that we can alleviate the problem greatly.

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