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Toto deVeer

Us States Cannot Default

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Just a quick post. I've been wondering how the US economic crisis will unfold. Legally, here's the overview:

US Federal Government: Can legally default, can run deficits.

50 US States: Cannot legally default, must balance budgets each year.

36,000 Municipalities : Can legally default, can run deficits.

This sets up an interesting scenario. From a financial perspective, the Federal government and a large number of municipalities have gotten themselves in deep doodoo. But the States are actually the backbone of the system. This is almost the opposite of Europe.

So, as I see it, the States will survive as the strong back of a new America, if there is collapse. What are the options?

It has to be this:

http://www.youtube.com/watch?v=r0rJWnRFUJA

Anyone for game theory?

In the UK, I have long advocated that Wales' best interests in the future would be for it to establish a national bank...

Edited by Toto deVeer

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QE

California has about $20 billion on deposit with the TBTF banks.

They should take this money, establish their own bank, use fractional reserve lending and recycle tax receipts through it. This would go a long way to solve their budget issues. On the other side, they have to restructure, but this is going to be a long term and on-going process.

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In the USA, is it the case that ultimate theoretical sovereignty resides with the authorities of each individual state. So whereas in UK, the land is ultimately owned by the Crown, in US the land is ultimately owned by the state in which it's located - apart from Washington DC, which is US Federal territory. Correct me if I'm wrong!

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In the USA, is it the case that ultimate theoretical sovereignty resides with the authorities of each individual state. So whereas in UK, the land is ultimately owned by the Crown, in US the land is ultimately owned by the state in which it's located - apart from Washington DC, which is US Federal territory. Correct me if I'm wrong!

I don't think that it is so clear, with regard to land ownership. Originally much of the land was the property of the crown, during colonial times, and later the Federal government made some purchases, such as Louisiana and Alaska. It could vary.

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In the USA, is it the case that ultimate theoretical sovereignty resides with the authorities of each individual state. So whereas in UK, the land is ultimately owned by the Crown, in US the land is ultimately owned by the state in which it's located - apart from Washington DC, which is US Federal territory. Correct me if I'm wrong!

Events 1861-1865 established that the federal government has sole sovereignty.

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Events 1861-1865 established that the federal government has sole sovereignty.

Until the states succeed (edit : or is it secede) again. :lol:

From what I've read, the states actually voted to create a Federal government; it didn't exist originally.

Be careful what you vote for!

Edited by Toto deVeer

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Until the states succeed again. :lol:

From what I've read, the states actually voted to create a Federal government; it didn't exist originally.

Be careful what you vote for!

The origional 13 colonies created the federal government after an earlier confederation didn't have enough central power to do anything, the current US constitution replaced the earlier articles of confederation. During the 1812-1814 war several of the coastal states who's trade was being decimated by the british navel blockade raised the issue of leaving the union, and it was mainly the southern states who told them no they can't. Certainly backfired for them a generation later.

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If you dont have the money, then you cant pay on time, and that is a default. I always thought that a default event was registered by those not receiving the money, not by those not paying it.

And as the states cannot print the federal currency, then the law that says they cannot pay is just idiocy. A bit like the law we have that says you have the right to a free education. Of course education isnt free, so how you can have a right to it is beyond me. Perhaps a judge could explain.

There was once a law passed I understand, that said pi was exactly equal to 3.

Wasnt it Alice in Wonderland who said that you had to believe 3 impossible things before breakfast? The next step is to put them on the statute books.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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