local i don t mind paying my local taxes if they are giving me services for schools and teachers and garbage collection. when i m paying taxes for people who retired 20 years ago i mind that a lot especially when the pentagons are 50% to a hundred percent higher than the private sector. jenna: that is a contract with the union. my grand nats with us a garbage man, right, he worked in garbage, and if he would have lived a longer life then his union got him this pension, so then isn t he owed that? i mean it s not his fault that his union negotiated that. but it is the city s problem if the city can t pay it. it s a great point. what happened these are what we call legacy costs. a lot of time the politicians from 10, 20, 30 years ago negotiated these contracts and now taxpayers are left holding the bag. and this circles back to how we started this conversation about why are cities in trouble because now they have to pay these legacy costs and one of the reasons a lot of cities are lo
corralled, then there is no solution to the problem. well, look, if g.m. hadn t had the option of a bankruptcy, it would be dead. bill: yeah,. i understand why the public service unions government workers, don t want the bankruptcy option. they don t want anything held over their heads. but, imagine, if a state has the bankruptcy option, the way a business would have the bankruptcy option, then the union has to calculate how will i make out if i refuse to renegotiate. bill: that s right. how county states get that option? would it have to be a congressional law passed? it would have to be a congressional law but then have to go to the supreme court and decide whether or not. bill: this is a big mess. the federal government can actually pass a law which would have effect over the sovereign states. it could be that the states are going to have to pass individually constitutional amendments which would allow that. because they are sovereign. this is not easy. but the only wa
to this is 2008 when we ended up having to bail out all of the banks, citigroup and other banks and aig and things like that. the reason we had to bail them out was they said they would never northbound a position where they had to be bailed out, they were so big and healthy we didn t need to worry about it. we re in the same situation with a number of states now. we have several states that are in deep, deep financial trouble, and i hope that none of them would have to fill for bankruptcy, but i do think we need a bankruptcy option in place. jenna: the slippery slope with the bail out is it s pandora s bobs. if you bail out some companies, then other companies see it that it s maybe a possibility, that we kind of open the door for that opportunity. so how exactly would it work for just some states as a last resort and maybe not others to use when they see fit? well, it s important to emphasize that you can structure the bankruptcy law however you
what costs and expenses can we pay for? and what can t we. the workers and unions say raise taxes and the state says we don t want to have taxpayers corporate and individuals leave because the tax burden is too high. so, you feed to find a solution. what this would do is put in experts who are independent, who can help resolve and determine what is sustainable and affordable, help them to determine that amount and also to determine a dedicated tax source to pay it so this problem will not come back. it will not be a band-aid but a fix. dave: the states station a massive burden. the states with the largest debt: illinois, 50 percent in relation to the budget. nevada. new jersey. north carolina. minnesota, california. look at the numbers as a percent of the state budget. getting back to the bankruptcy option, which gingrich has supported from what we understand, what is the biggest