First State In US History To File Bankruptcy And Have Liberals To Thank For It

Illinois is one of the few states that oppose President Trump!

We all know that the so-called sanctuary cities could lose the federal funding and so could Chicago and the state of Illinois!

But their liberal logic could give them something that is even worst!

Thanks to wonderful left-wing policies, the state of Illinois is on track to become the first state in history to go bankrupt.

According to CBS News:

A financial crunch is spiraling into a serious problem for Illinois lawmakers, prompting some observers to wonder if the state might make history by becoming the first to go bankrupt. At the moment, it’s impossible for a state to file for bankruptcy protection, which is only afforded to counties and municipalities like Detroit.

Chapter 9 bankruptcy protection could be extended to states if Congress took up the issue, although Stanford Law School professor Michael McConnell noted in an article last year that he believed the precedents are iffy for extending the option to states. Nevertheless, Illinois is in a serious financial pickle, which is why radical options such as bankruptcy are being floated as potential solutions.

Rating agency Moody’s Investor Service earlier this month downgraded Illinois’ general obligation bonds to its lowest investment grade rating, citing the state’s growing pile of unpaid bills and its mounting pension deficit. Illinois, by the way, has the lowest credit rating of any state. Lower ratings mean higher borrowing costs since lenders view such borrowers as riskier bets.

“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40 percent of the state’s operating budget,” the agency noted.

As noted by the Fiscal Times, Illinois is the only state that’s been operating without a balanced and complete budget for almost two years.

“We’re like a banana republic. We can’t manage our money,” Gov. Bruce Rauner said after the Illinois Legislature failed to produce a full 2017 budget earlier this month.

So don’t fool yourself Illinois could face bankruptcy!

Federal bankruptcy code permits cities, school districts, and other local governments to file bankruptcy.

Some have done so, and I expect many others will in the coming years. Cities like Detroit and others in California have used bankruptcy to renegotiate their pension plans and other debts.

But Illinois could face total bankruptcy!

Because If the law should change and a state actually tried to file for bankruptcy, creditors would immediately file constitutional objections under the contracts clause and the 10th Amendment.

Some legal scholars think those barriers can be overcome. The argument would go to the Supreme Court and get resolution there!

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Michelle M.

Michelle is American conservative author she is committed to the constitutional principles of individual freedom, economic liberty, limited government, personal responsibility, and traditional values. She is a libertarian and provocateur who believes in freedom and liberty for all Americans. As a passionate journalist, she works relentlessly to uncover the corruption happening in Washington, while exposing politicians and individuals who wish to do us harm. She writes for Right Journalism, Supreme Insider, and Conservative US!