Monday, September 21, 2009
Texas Goes Bust, Sort Of
"The Texas Tomorrow Fund, faced with possible bankruptcy, is drastically cutting its payout on cancelled contracts, angering many parents who signed up for the fund between 1996 and 2003. ... Tuition is three times what it was 10 years ago, so the payout would mean a windfall for many families. But last week, a letter went out saying that in case of canceled contracts, the state would reimburse only the amount parents paid into the fund, minus adminstrative fees of around $36 per year. 'Now I will be getting back less than I paid in. How is this different than what Bernie Madoff did?' San Antonio resident Philip Seeling said, referring to the New York financier who bilked his clients out of billions", my emphasis, Melissa Ludwig at the Houston Chronicle, 4 September 2009, link: http://www.chron.com/disp/story.mpl/moms/6601859.html.
Anyone who thinks he has an enforceable contract with a government is crazy. Imagine, this happened in Texas, a relatively solvent state. Anyone still want muni bonds? Windfall my arse. If that's what was contracted for, that's what was contracted for. The Chronicle should not editorialize in its news pages.