Bernanke Is Being Grilled About Muni Debt Because Republicans Want The States To Collapse
Ben Bernanke is speaking in front of the Senate today, and one of the big topics during the Q&A session is the state of muni finances. The Fed Chairman doesn’t expect any state to default, but he also says he doesn’t believe it’s within his mandate to bail out the states (e.g. by buying muni debate) should it come to that.
The Senators keep hammering on this point, and there’s a reason for it. The GOP is hoping for states to collapse, and they want to be absolutely sure nothing gets in the way of that.That’s not our opinion… James Pethokoukis, the conservative Reuters columnist, reported in December that republicans have a "secret plan" to pusht he states into bankruptcy. Part of that plan was the non-inclusion of the Build America Bond program in the lame-duck tax deal.