The 50 states and 90,000 other non-Federal government entities of the United States are now unable to maintain any pretense of functioning and paying up on financial claims, and are experiencing, instead, a process of disintegration of horrific proportions. While many pundits are presenting these situations as financial crises, the reality is that they represent a physical-economic collapse which is the lawful result of more than 40 years of a post-industrial paradigm, and the looting of living standards by the imperial monetarist system.
The only solution to these individual crises lies in the Constitutional powers of the Federal government, which must immediately do two things. First, it must cancel trillions of dollars of phony toxic debt, which is clogging up and oppressing our financial system; the way to do this is through re-implementation of Franklin Delano Roosevelt's 1933 Glass-Steagall law (repealed in 1999), which imposed a ruthless separation between commercial banking and investment (speculative) banking—leaving the latter to hang out to dry. This law was firmly rooted in the U.S. Constitution.
The bonded indebtedness of states and municipalities is estimated at $2.8 trillions; this does not include other obligations, especially pension fund payments due.
Some $500 billion, within the $2.8 trillion, is related to "interest rate management" collateralized debt obligations (CDOs) and other such looting "products," foisted on states and localities. So far, $4 billion has been paid up in recent years by municipalities, to exit their contracts with JP Morgan, Bank of Canada, Goldmas Sachs, and other vulture operations, which marketed the interest-rate deals.
The level of unfunded pension obligations is in the range of $3-3.5 trillion, for both states and local entities.
