Federal policymakers are working on plans that will allow the states to declare bankruptcy, and thus escape their unmanageable load of debt — including unfunded government pensions. The difficulty is the U.S. Constitution, which grants the states sovereignty, and therefore allows no mechanism for their declaring bankruptcy. Unlike the federal government, they cannot simply print money to get themselves out of trouble. However, the Constitution is generally no longer a problem, so presumably the feds will iron out the wrinkles. Where there’s a will, there’s a way.
Meanwhile, in Portugal, a 10% pay cut in the salaries of civil servants has come into effect, as a part of the country’s austerity program.
In other news, soldiers and politicians led a major protest in Copenhagen against Hizb ut-Tahrir, which held a debate on the premises of the Royal Library today.
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