Plus, he’s a despicable human being

“When Cuomo protested McConnell’s bankruptcy idea, the New York governor raised the risk of chaos in financial markets. But McConnell does not advocate state bankruptcy in order to subject state bondholders to hardship. Obviously not! When McConnell spoke to Hewitt about fiscally troubled states, he did not address their bond debt. He addressed their pension debt. State bankruptcy is a project to shift hardship onto pensioners while protecting bondholders—and, even more than bondholders, taxpayers. …

“But McConnell seems to be following the rule “Never let a good crisis go to waste.” He’s realistic enough to recognize that the pandemic probably means the end not only of the Trump presidency, but of his own majority leadership. He’s got until January to refashion the federal government in ways that will constrain his successors. That’s what the state-bankruptcy plan is all about.”

The Senate majority leader is prioritizing the Republican Party rather than the American people during this crisis.

One thought on “Plus, he’s a despicable human being

  1. I’d phrase it the other way: Beforehand, a bunch of states (Illinois being prominent) had huge unfunded pension obligations, but it was really unlikely that the federal government would pony up to pay them, because the political argument is really hard to make (unless you’re one of the state workers whose pension is on the line). With Covid, the idea can be floated that the federal government should give a huge block of money to the states, and with some dexterity, you could include not only making up for lost current taxes (which is due to Covid) but also a chunk of those unfunded pension obligations (which are not). McConnell is trying to block that, since if the federal government forks over, there’s no way to get the money back. Even better, if a state declares bankruptcy, they would have a direct way to shed those obligations, and then the risk that the federal government would take them on is pretty much gone forever.

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