[allendale]

Eventually the Federal government will be forced to manage their bankruptcy. However if a Republican Congress is smart they will assign a Federal czar who will have the real power of taxing, spending and essential governance in those states.

[VietVet876]

Congress would need to to pass legislation allowing states to file a bankruptcy case.

[Buckeye McFrog]

Eventually the Federal government will be forced to manage their bankruptcy. However if a Republican Congress is smart they will assign a Federal czar who will have the real power of taxing, spending and essential governance in those states.

I agreed with you until yesterday, when I learned that under current law a state CAN NOT declare bankruptcy (while strangely the City of Detroit can).

At the end of the day they'll hold the gun to our head of "too big to fail", and we'll bail them out in the name of avoiding economic cataclysm. It's worked before. They know it, which is why these states keep spending.

[Uncle Sham]

The U.S. Constitution, in Article 4, Section 4, prohibits any federal bailout to a bankrupt state.