The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

State Bankruptcy:
The Latest Scam to Attack Us

Jan 24, 2011

Members of Congress are trying to figure out a way to make it legal for states to declare bankruptcy, to “get out from under their debt” – but the only debt they talk about is the pensions of public workers.

Right now, many state workers’ pensions are protected by law in the state constitutions – so Congress is seeking a way to legally get around that and allow the states to simply ditch those pensions.

These states are seeking a way to get out from under a promise made to every one of their workers: that if these workers gave thirty years of their lives for the state, and if the workers gave up pay raises, that money would be set aside to ensure those workers the income they would need to continue living after they retire.

The states didn’t do that! Money wasn’t set aside – it was gambled away in stock markets and given away in tax breaks to corporations – not to mention into the pockets of corrupt politicians and their friends. And now, they want to use bankruptcy as a trick to wipe out that obligation to their retirees.

This is only the latest in recent attacks on public workers – and in fact, it’s an attack on all working people in the states claiming their debt burdens are too high. States use their employees as a scapegoat, in order to cut services and raise taxes on ALL ordinary people – while continuing to offer tax cuts and give-aways to large corporations.

The ONE thing holding Congress back is: if states declare bankruptcy, the banks holding bonds on their debt couldn’t collect. It’s why they’re working so quietly behind the scenes: they want to find a way for the states to dissolve their pension obligations – without getting out of their bond obligations.

If there’s one thing that shows which class these public officials truly represent, it’s this: they think nothing of tossing out pensions, cutting services and hiking taxes on working people ... but they certainly don’t want to reduce the funds of their friends, the big banks!