What effect do you think that would have on the bond market.
Unknown at least as far as the long term.
Furthermore, not all states would have to declare bankruptcy.
Some states are in good financial and economic shape because they have taken the hard steps necessary to ensure future sustainability, job growth, pro business policies, lower tax structures etc.
My concern is the "federal bail out with strings", since it will likely be conditioned on the end of federalism. Federal money upon unilateral acceptance of federal power.