Will Grigg?s Liberty Minute

January 21, 2011

Serious discussions are underway on Capitol Hill about the creation of a national agency to manage the impending bankruptcy of municipal and state governments. Predictably, the chief concern here is to preserve the salaries, benefits, and pensions of public employees.

In a state or municipal bankruptcy proceeding, public employee contracts would be subject to renegotiation. Unfunded public employee pensions would be treated as unsecured debts to be paid off for as little as pennies on the dollar.

Government employee unions are seeking to forestall this development by lobbying Congress to federalize management of their benefits through a Public Pension Funding Authority. A related proposal calls for federal legislation to regulate state government bankruptcies. None of this is necessary, since state governments can arrange bankruptcy settlements through their own courts.

Lew Rockwell of the Ludwig Von Mises Institute points out that ?as part of bankruptcy, taxes should be drastically lowered, bonds repudiated, pensions abolished, and employees fired.? This would be a painful process. But pain is an inevitable component of repentance.

Let us take back the liberty wherewith Christ has made us free.