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Just wondering: What if Delaware just ignored the law and ran a deficit?

I know it's a strange question, a question I haven't actually seen seriously mooted about, because it's so politically incorrect that neither Governor Jack Markell nor any of our legislators are talking about it.

But what if we just borrowed the money and ran a deficit for a couple years, as the Keynesians assure us is the proper course on the national level?

Delaware supposedly has a great credit rating (thanks, one would presume, to the yeoman efforts of our former State Treasurer); I bet even today we could find investors willing to take a chance on America's Switzerland.

Of course, somebody would sue us immediately, but that's we have all those highly paid merit-exempt attorneys on retainer, right? They could keep this bottled up in court for years.

When we finally lost the case, what could the judge order? A repudiation of the State debt? An immediate draconian tax increase to pay off the State debt in a single year? Closing down Delaware's schools and forced busing into Maryland and Pennsylvania?

No, we'd probably just work out a State bankruptcy deal that gives 55% ownership of the State to its own employees' unions (Tommywonk calls this stakeholder capitalism) and then stiff our other creditors for thirty cents on the dollar.

After all, there's no reason that the Federal government should get to have all the fun breaking the rules of our financial system.

Just wondering....

Comments

Anonymous said…
You hit on something here Steve. The Delaware Constitution gives all powers for making law with the legislature. Why isnt someone writing a bill stating "we will not balance the budget in 2009, and 2010, and have a sunset provision in it. Hopely the economy will return and then go back to a balanced budget. In the meantime, the legislators have time to write new laws, enact new legislation that will solve or help balance the budget in the sunset year.
Brian Shields said…
I was avoiding the offhanded comment that they just pass a constitutional amendment repealing the balanced budget, but I don't want to even hint at it, so I have kept quiet.

Too late now
callit said…
That post was awesome. I like it.
kavips said…
Figures someone from a third party would find a solution the other two missed...

Wish I thought of it first.

lol.

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