Some legal thoughts. I don’t know if it would be constitutional, but I would condition a federal bailout on reversion of the state to territory status, with an opportunity to reenter the union after it gets its fiscal act together, possibly as multiple states. For instance, if some of the eastern and/or northern counties wanted to band together to form a new government independent of Sacramento (or even including Sacramento, but independent of the coastal megalopolises) they could do so and apply for readmission. Alternatively, they might want to apply to be annexed to (say) Nevada, or Oregon.
Same thing for Illinois and New York, though the impetus to break them up would be much less in those cases.
You’re beginning to sound as wacky as me. One of us has got to be the designated sound mind. But I like it (of course.)
Isn’t there a part of California (or maybe Nevada) that wants to become a separate state anyway?
I don’t know if it would be constitutional, but I would condition a federal bailout on reversion of the state to territory status…
I think the only way this would pass constitutional muster is if the California legislature could be persuaded to dissolve the state government. The land would then revert to federal incorporated territory.
But getting the California legislature to do anything rational seems to be a long shot. Perhaps a ballot initiative dissolving the state government?
I’d say that it should be treated just like any other sovereign that goes bankrupt. Bankrupt in that case means that the sovereign says “I’m only paying x on the dollar to current debt holders.” After that, the case is closed and life goes on – but no one in their right mind loans that sovereign money anymore…
Bankruptcy law in general exists to protect the debtor from the ability of the lender to obtain debtor-adverse rulings from the state. States need no such protection.
Perhaps a ballot initiative dissolving the state government?
Now you’re expecting California voters to be rational? If they were, we wouldn’t be in this mess to begin with.
Not being a lawyer, ‘I only know what I’ve read on the internets’. David seems to be correct for cities but there isn’t any law covering bankrupt states. A federal law covering this would need to identify the court having jurisdiction and the scope of remedial actions. Allowing counties to petition to form a new state might be worth doing but I think this would definitly require an amendment to the constitution since the states are admitted to the union as soverign entities.
Both New York and Illinois would benefit from being divided into two – in both cases, splitting off the major metro area from the rest of the state.
California, well, I’d want to see the Bay Area and greater LA combined in one Cal urban state, to keep each from getting two Senators, and for the entertainment value of the intercity brawls that’d result. That’d almost by itself be worth the price of the bailout…
That would immediately cause the current citizens of Oregon or Nevada to become an electoral minority within their own former state, and the crazies in LA and San Francisco would be given another State to ruin.
I’m pretty sure that Oregon and/or Nevada would not agree to that. And per the Constitution, you need them to agree.
Personally, I’m with David. No bailout for California (or New York, or Illinois, or New Jersey). If they default, so be. Creditors take a hit and no one lends them money at low rates for many, many years. Just like Bankruptcy for everyone else.
By the way, I’m against any division of States (California, New York, or whoever) that would create more Democratic Senators.
However, if Texas wants to divide itself into four States, I think I’d be okay with that … 🙂
I think it should just be given back to Mexico. That would be the only socially just solution…
IF it becoems a terratory, Fiensten and Boxer and all of the California congressional delegation would lose their jobs as territories have no federal representation.
They also get no vote in the Presidential race.
In other words, it would make it impossible for a Democrat to be elected President.
Add in Illinois and it would be a total rout.
I sure would hate to lose Dana Rorahbacher but it might be worth it. I am sure a smart fellow like him would land on his feet.
Brock, I didn’t say to give the entire state to Nevada/Oregon. Just the less populated sane parts.
Remember the ancient Vulcan proverb. Jerry Brown might be just the guy to stop the fiscal hemorrhage. California ≠ Missouri, but we have a Democratic governor here who balanced the state budget with $300M in sequestration (to be sure, that’s only $~50 per capita, which is probably an order of magnitude less than y’all need to cut).
Having said that, I love the reversion-to-territorial-status idea.
How about splitting California in 3? A coastal urban state, a northern inland state, and a southern inland state?
How about splitting California in 3?
I thought Californians had been more worried about it splitting in two…
So you think reversion to territorial status would protect the rest of the states? Dude, I’m just saying. We wouldn’t be coming back.
I still think we should give California to China a payment for the national debt.
The Progressive Left likes to whine about the disproportionate influence the smaller states have in the Senate and in the Electoral College. Probably because those states also tend to be GOP. Splitting the larger states up would have the effect of evening out those disparities.
Also, Congress sets the territorial boundaries, and can redraw those boundaries at will. That’s what happened during the 1860s, when gridlock over the issues were finally broken by when a sizable part of the Democratic Party left Congress and attempted to start their own country.
Note also that there is a distinct correlation with larger states having greater fiscal problems. Let’s face it, if the states in trouble were Wyoming, Kentucky and Arkansas, the Dems would be the first to say “let ’em fail”. (And yes, I know that Texas and Florida are large states, but not on that list.)
Whatever you do, it is important to have 57 states . . .
There’s always been talk here of Northern and Southern CA. I would prefer Coastal CA with a line between SF and Sacramento including LA Co. and then OC San Diego with interior CA up to Siskiyou Co. being another State. That state would be a red state mostly.
The problem with lending to the sovereign is that the sovereign can tell you to take a hike. A lot of lenders seem to have forgotten that historical lesson and the best way to resolve the California situation is to allow that haircut to be delivered.
The only reason I can see a bankruptcy being required is not because of California’s debt–it is because of the state’s pension obligations. If courts take a hard line on the constitutional protection of those plans the state will need to find a way to modify them.
Multiple states? Yeah, that’s what we need. Left coast socialist moonbats electing even MORE Senators.
Jerry Brown was the guy who got us into this mess when he signed the agreement to let the public employees form Unions.
That was the ‘Camel with its nose in the tent’ act that gave the Givemes
the control over the Givers.
Article IV … Whatever. Not a problem with this living constitution I’ve heard so much about.
David has it right. Just expand normal bankruptcy law to states. This will require an act of Congress and will allow the state to repudiate its debts and have a bankruptcy judge restructure the pensions, how much the bondholders get back which programs cease to exist. Here’s a list of all the valuable California agencies…you’ll be shocked at the size of this list:
http://beforeitsnews.com/story/292/191/Useless_Agencies,_and_the_Need_to_Cut_Spending.html
A few notes on California.
We have the highest gas tax.
Second worst credit rating (Illinois)
Second worst rated K-12
12.4% unemployment.
The largest underfunded state pension problem (2 studies estimate it over 500 billion)…state officials say it is in the 80 billion neighborhood (not likely)
Our two largest cities San Francisco and Los Angeles are also in dire fiscal straits.
Problem being during territorial status there is no reason to think Dems wouldn’t comprise the government just like they do now. We’d have more and bigger parasites and leeches.
Maybe Mother Nature will do everyone else a favor and have the western portion of California to collapse into the Pacific Ocean.
CA is so big that merging w/ another state seems insurmountable. However, I think that that is the trend; St. Louis City is trying to merge w/ the larger county, Bell CA is likely to dissolve into another county, a RI city was looking to merge w/ Pawtucket. It’s all about mechanizing a way to mooch off of others to momentarily sooth the pain of the reality in front of you.
I wonder what interest China might have in CA?
As Blue says, the unfunded pension obligations are the real problem, and the courts already take a hard line on those. Courts, incidentally, that are populated with judges whose pensions are among those that the state would like to modify. Is it any wonder the judges have ruled to protect their own pensions?
We are approaching points where governments are paying more to former workers than to active workers, and when cuts have to be made, it’s now the active workers and current services that get cut. That is a fundamental failure of government, whose responsibility in a social contract is to provide said functions at the consent of the governed. When a municipality does not provide adequate police staffing because it has to pay more for ex-officers pensions, that is, in my opinion, the definition of a failed entity. If pensions are not adjusted, it will be the ruin of all.
Whatever the outcome, the liberals won’t be responsible for anything negative. It’s in their political DNA.
Some interesting info on Wikipedia
http://en.wikipedia.org/wiki/List_of_U.S._state_partition_proposals#California
There have been several efforts to split California into two or more states as far back as 1854. In 1859. the governor and legislature approved splitting the state in two at the 36th parallel, but due to the impending Civil War, Congress never voted on the issue. In 1941, several rural counties briefly (but only symbollically) seceded to form the state of Jefferson. The state senate in 1965 voted to split California, but the state assembly rejected the plan. As Instapundit would say, read the whole thing.
State bankruptcy and receivership? It’s been done in a country whose bankruptcy system is pretty much similar to ours:
http://en.wikipedia.org/wiki/Commission_of_Government.
I like the idea of dividing California into three pieces. East California could be everything east of 1-5 plus San Diego, to give it a major harbor. Everything west of I-5 and below San Luis Obispo is SoCal, everything else is NoCal. It wouldn’t be so bad for the GOP; they’d have a lock on East California, and they could run candidates in NoCal and SoCal each more attuned to the local electorate; libertarian-minded in the north, more social-conservative in the south. They’d end up being more competitive in each of the coastal states.
Make a breakup part of the bankruptcy bail-out conditions.
To modify what James Madison summarized in Federalist 51: That because men are not angels, they need government but that TO SHOW government must be controlled and limited for the same reason, California exists as a progressive stench on a brazen, brash and bold-as-barf-at-a-banquet scale of depraved insanity. Thus, in the laboratory of states, other state leaders can cogently look at California and say: Ye Gods, We shall not do what they do!
Keep California as it is, wall off LA county, and the San Franpsycho area. Give it to the Socialibs/Obamadems for their Utopian pipe dream experiments, with no federal aid or federal or state voting rights.
Mine and seal the southern border, give incentives(meaning severe punishments for businesses or individuals who hire or aid and abet illegals) for the illegals to self-deport either back to their 3rd world wonderlands, or to the new SanFran/LA paradises for parasites.
You wrote: “Same thing for Illinois and New York, though the impetus to break them up would be much less in those cases.”
Don’t know if you followed the governor’s race here in Illinois, but the Democrat Lt. Gov. Pat Quinn won against Republican Bill Brady. Quinn took three (3) counties out of 102 (hundred and two) in Illinois. Of course, one of those counties was Cook, where Chicago is located. The other two are from the failed minority/majority counties where E. St. Louis is located (remember they laid off half of their police force?) and Cairo, which is a Haitian-like basket case.
So, I think that raises some questions about your opinion that there is less impetus to break (Illinois) up. Those of us in Downstate Illinois pray for that to come about.
The Japanese bombing of Pearl Harbor interrupted the movement to combine southern Oregon counties with northern California counties to form the State of Jefferson. The movement to create the 51st state was put on hold but never fully extinguished.
http://bigthink.com/ideas/21511
Well, West Virginia did it:
“The United States Constitution says a new state must gain approval from the original state, which never occurred in the case of West Virginia. Since the Restored Government was considered the legal government of Virginia, it granted permission to itself on May 13, 1862, to form the state of West Virginia.”
Rand –
What you are thinking of is the State of Jefferson.
http://en.wikipedia.org/wiki/State_of_Jefferson
But who build the HSR?
The South was occupied for 12 years … I would say there is precedent for a Federal takeover …
Mfk, When I grew up in CA, Mexicans came to CA to be Americans, Now they arrive by the boat load to take it back.
I live in Northern Illinois. Colloquially known as Down State. I must say it is really interesting to be disenfranchised by Chicago. I’d love to see Chicago as a City-State.
If anything saves CA, it will be when the state is forced to turn general revenue obligations into secured debt. It will either get religion or run out of things to hock. Either way, secured debt will force CA to eventually spend within whatever means remains.
CA will start usingsecured debt when lenders stop accepting general revenue obligations.
Lenders will stop accepting general revenue obligations when the state stops paying on them.
The cities are the source of the problem. Without the voting population of the cities, the states cannot screw up so badly. So make the cities federal possessions, without US Senators or representatives, and without any rights to vote in national elections. Permanently.
And no public sector unions for the cities, or any federal worker.
That simple reform would be the bare bones beginning of more significant reforms to decentralize power.
The most important revelation of a state bankruptcy is the demonstration that the people of that state are unfit for self government. Hence revocation of statehood is not just punitive but recognition of the danger to the Nation of allowing a state of incompetents have a say in the management of the country. If they are unfit for self-government they are surely unfit to govern me. It becomes a check against the “A democracy will last until the people discover they can vote themselves money.” Revoking statehood also becomes a huge win for federalism by allowing some states to fail and be reformed while the management of the country is handled by the responsible states.
If a state goes bankrupt it should loose its statehood. But it should not become a territory. That’s an insult to territories that have managed their own affairs successfully for a century. It should rightly and correctly be called a “failed state”. The state constitution is revoked because you’ll probably find that it is rive with corrupting clauses that were inserted that promoted the collapse. Their congressional delegation should be ejected from the Congress. The governor should be replaced by a governor-general appointed by the President with the advice and consent of the Senate to manage the executive functions of the state and essentially serve as the receiver, the finances fall under a team of federal bankruptcy courts to do what federal bankruptcy courts are supposed to do in place of the state legislature that failed in its responsibilities. Congress would take over non-fiscal legislative activities. This federal supervision would last until the failed state government is on a sound fiscal footing. During this time, the failed people will not be voting on any federal or state elections. Think of it as a time out.
Once the failed state is stabilized, state level elections can be organized to begin reassembling a failed state government, which will prepare a new state constitution, gradually take over state functions again and then reapply for full statehood so they can have federal representation again.
I think the 112th Congress should implement this as legislation in order to warn the failing states that, “No, there will be no bailout. Quite the contrary in fact.”
I have a better idea, an amendment to the constitution authorizing the states to print their own money as legal tender, thus ending the federal monopoly that allows some states to free ride off other states–the monetary version of the old Federal military draft that exempted lots of middle class people from those “death panels.” The states would get to devalue or enhance the value of their currencies as the case maybe–for example, California could simply inflate its bond obligations away by printing more money, forcing those rich out of state bond holders to take a haircut. Meanwhile, San Francisco and Beverly Hills would have to pay for Texas oil in more expensive Texas dollars! Yes, floating exchange rates, it’s even better than California’s cap and tax, which will turn out to be a rerun of Enron!
J, how is it decided that a state is a failed state? If it can be done without the consent of the state in question, then someone will game the system (say revoke statehood for states that are dominated by political opposition or rival ideologies).