Should states be allowed to file bankruptcy?

[jltrent]

https://nymag.com/intelligencer/2020/04/why-mitch-mcconnells-state-bankruptcy-idea-is-so-stupid.html

 

[ccr]

Didn't read all of that article, but at what point does this bailout end. Trillions of dollars of debt and the US taxpayer is responsible. Servicing this debt, and future deficits added to the debt will be to much for the US taxpayer to handle. Then what?

We are borrowing money to pay the interest on the debt we have now. I don't think some folks realize how bad our debt situation is.

Making money out of thin air and borrowing money can't go on forever.

 

[Brute 23]

It's the only way I see to have accountability. If some businesses get hung out to dry with unpaid bills maybe they will think twice about doing business with them. They let these states rack up bills knowing the fed govt will bail them out. Plus, I'm tired of bailing them out, too.

 

[Caustic Burno]

Didn't read all of that article, but at what point does this bailout end. Trillions of dollars of debt and the US taxpayer is responsible. Servicing this debt, and future deficits added to the debt will be to much for the US taxpayer to handle. Then what?

We are borrowing money to pay the interest on the debt we have now. I don't think some folks realize how bad our debt situation is.

Making money out of thin air and borrowing money can't go on forever.

Sooner or later this house of cards has to collapse. I heard a tidbit that the USA is after China to forgive our debt over Corona.

 

[Caustic Burno]

Interesting take
I doubt it works.
It makes for good news and ratings, that's about as far as it goes I bet.
https://www.google.com/amp/s/www.washingtonexaminer.com/news/republican-congressman-calls-on-trump-to-make-china-forgive-us-debt-over-coronavirus-crisis%3f_amp=true

 

[HDRider]

Many states have bought votes with rich pension promises. Many of those pensions have been greatly underfunded for years.

I feel no obligation to bail out states that over promise, and under deliver.

I am not sure how bankruptcy would effects bond holders for that state debt.

 

[Brute 23]

Interesting take
I doubt it works.
It makes for good news and ratings, that's about as far as it goes I bet.
https://www.google.com/amp/s/www.washingtonexaminer.com/news/republican-congressman-calls-on-trump-to-make-china-forgive-us-debt-over-coronavirus-crisis%3f_amp=true

It sounds good but none of that money will make it to any one who needs it. If they forgive US debt the politicians will just run it up again.