Bankruptcy Articles

Fixing Puerto Rico

Bankruptcy is the answer.
May 25, 2015

Puerto Rico is in a financial bind. The Commonwealth, along with its public utilities and various municipalities, collectively owes more than it can realistically repay.

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Detroit Hard Luck City

1:01 PM, Jul 25, 2014

The law does not always deliver what people might consider the “fairest” outcome. But setting aside the law and the various compromises made by elected officials when they crafted it in order to deliver a “fair” outcome would be a costly mistake—costly for every single city, county or state government that borrows money.

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‘Student Loan Relief Now’

The case for allowing these debts to be erased via bankruptcy.
Jun 30, 2014

My father is one of the reasons that student loans cannot normally be discharged via bankruptcy. Such an outcome was never his goal: quite the opposite, in fact, because exempting student debt from bankruptcy relief makes little economic sense and is patently unfair to the students saddled with such debt. A sensible reform of this law could slow tuition growth and put a lid on exploding student debt while sparing young adults the debilitating stress of a debt they can never hope to repay.

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The Art of the Deal

Detroit’s restructuring proposal.
Apr 21, 2014

From the moment Detroit filed for bankruptcy last summer, comparisons to the 2009 Chrysler and General Motors bailouts have abounded. Most highlight the differences, noting that the federal government is unlikely to pump billions of dollars into Detroit. But although the differences are real, the restructuring plan that Detroit has recently proposed suggests that the city’s bankruptcy may have more in common with the car bailouts than anyone imagined. Unfortunately, it’s the abuses of the latter that could be replicated—and even extended—if Detroit’s plan is upheld in its current form.

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Big Failures Cost Big Money

2:49 PM, Feb 05, 2014

Detroit’s government by machine-party politics (Democratic, in case you were wondering) resulted in the largest municipal bankruptcy in American history.  And the meter is still running.  As Reuters reports:

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Dysfunctional Barber

Aug 05, 2013

It's been a while since Benjamin R. Barber, the left-wing political scientist and ex-Howard Dean adviser, attracted the attention of The Scrapbook. Barber is one of those anticapitalist types who is careful to disguise his unpalatable ideology in anodyne terms—see Jihad vs. McWorld: How Globalism and Tribalism Are Reshaping the World (1995)—in order to be welcome at Davos, or the Kennedy School, or Foundation World. 

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More Bankruptcies, Please

Detroit shows the way.
Aug 05, 2013

Although Detroit’s bankruptcy is only a few days old, it already has become clear that it could bring answers to two very important questions: whether municipal bankruptcy law is a plausible alternative to either bailouts or decades of fiscal malaise for large cities that are sagging under unsustainable debt, and whether it is time for Congress to enact a bankruptcy law for states too. So far, the answer to both questions looks like yes.

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Detroit May Shift Retiree Health Care Costs to Obamacare, Taxpayers

Unintended consequences.
7:01 AM, Jul 29, 2013

The bankrupt city of Detroit may have found a way out of its health care woes for its retired city workers: shifting the costs to taxpayers nationwide via Obamacare. If Detroit and other struggling municipalities follow through, the result could be a "huge cost" to taxpayers.  The New York Times has the story:

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Detroit Mayor: No Federal Bailout 'Yet'

10:17 AM, Jul 21, 2013

Detroit mayor Dave Bing tells ABC's George Stephanopoulos that there's no bailout "yet":

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California Failing

9:11 AM, Jul 11, 2012

San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer.

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Up in Smoke

Harrisburg’s waste to energy to bankruptcy saga
Oct 31, 2011

On October 12, Harrisburg, the capital of Pennsylvania, filed for bankruptcy. The move took most of America by surprise—​

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