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.

4 comments:

Cleanthes said...

Article I, section 10, clause 1 of the Constitution provides that “No State shall … pass any Law impairing the Obligation of Contracts.”

Anonymous said...

Americans have no rememberence that governments can fail... or fall down on their obligations... we've been pretty stable for a very long time... even including the late 1960's and the early 1930's...

So governments not providing the maximum largess is kind of a shock... and there will be much, much more of this...

Hold on to your hats...

Jr Deputy Accountant said...

bwhahahahahahahahahahahahaha LOL.

I have a limited amount of sympathy remaining. So sorry but these people can't have any of what little I have left.

that's what happens when you make deals with the devil, erm, government.

sort of reminds me of that lady on Cops who called the police because she attempted to buy crack cocaine and was instead sold dry wall. Robbery! Yeah ok...

Pffft.

W.C. Varones said...

The now-closed fund, later renamed the Texas Guaranteed Tuition Plan, allowed parents to prepay for tuition at locked-in rates and promised that if a child died or received a full scholarship, parents could cancel the contract and receive a payout based on current tuition and fees at public universities.

That's a pretty good incentive to kill the little sh___ if they mouth off!