Jan20
For years, states and municipalities have borrowed money and promised pension benefits without adequately funding these liabilities. Some municipalities have reached the brink of bankruptcy, only to be bailed out by the state. What would happen if no one came to the rescue? Or if it was a state that needed a bailout? Some are concerned that it is only a matter of time before a state comes begging to the federal government for a bailout and have suggested that a bankruptcy law for states is needed to ensure that it is creditors, not federal taxpayers who foot the bill.
Bankruptcy Law—Not Bailouts—for States; State Bankruptcy Is a Bad Idea (subscription required)