Exchequer

DeMint: There Will Be No Bailout for the States

Here’s the question I put to Sen. Jim DeMint during a brief telephone interview last night:

Chances are pretty good that Illinois, California, and New Jersey, and maybe a dozen or more other states, are going to go broke — because they cannot meet their pension expenses. All told, the states are about $3 trillion short, and they’re going to come looking to Congress for a bailout. Are you going to write that check, or are you going to let them hang and watch the municipal-bond market collapse? Which angry mob do you want to face?

Senator DeMint did not exactly say, “We’re going to let the municipal-bond market collapse,” but it sure sounded a lot like that. Republicans have a three-part plan for the states’ fiscal crises:

First, create a legal process to allow states to renegotiate debts and union contracts in something akin to bankruptcy.

Second, forbid a congressional bailout of the states.

Third, forbid the Fed to buy states’ debt as part of a freelance Ben Bernanke bailout.

In other words, prepare a site for crash-landing state finances and then forcibly guide them to it.

That third part is interesting, no? Republicans are looking askew at the Fed’s new career as at-large bailout-maker.

The Republicans’ plan looks pretty ugly, but I do not see any plausible alternatives. And I see one big opportunity: This is the chance to pry the parasitic government-employee unions off the body politic. They have bankrupted the states, and the resulting crisis gives us the means and the opportunity to put an end to their plunder. When those contracts get renegotiated, Republicans should insist that they address more than pensions.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.

Most Popular

Elections

The Democrats’ Disastrous CNN LGBT Town Hall

A few days after Donald Trump committed the worst foreign-policy blunder of his presidency by betraying America’s Kurdish allies in northern Syria, former vice president Joe Biden, the elder statesman and co-frontrunner in the Democratic presidential primary, was on a national stage talking to CNN’s primetime ... Read More
Politics & Policy

Fox News Anchor Shepard Smith Resigns

Fox News Channel's chief anchor, Shepard Smith, announced on air Friday that he would be resigning from his post after 23 years with the network. “This is my last newscast here,” said Smith. “Recently, I asked the company to allow me to leave Fox News. After requesting that I stay, they obliged.” He ... Read More
NR Webathon

Don’t Let Michael Mann Succeed

I  enjoyed the running joke of Jarndyce v. Jarndyce in the great Dickens novel Bleak House, back when I first read it. Little did I know that one day I and the magazine that I love would effectively be caught up in a version of that interminable case, courtesy of a litigious climate scientist with zero regard ... Read More
White House

What Is Impeachment For?

W hat is impeachment for? Seems like a simple question. Constitutionally speaking, it also appears to have a simple answer: to cite and remove from power a president guilty of wrongdoing. Aye, there’s the rub. What sort of wrongdoing warrants removal from power? I’d wager that the flames of ... Read More