[businessprofessor]

Bankruptcy will be a disaster also especially because bankruptcy will ripple across the entire economy. A California bankruptcy may be followed (or preceded) by bankruptcies in other rat paradises (New York, Michigan, Illinois). The impact of state bankruptcies on the muni bond market will be devasting. I think that the threat of bankruptcy has already had a large impact on the muni bond market. There may not be an option to bankruptcy. The rats will pump money into these states. However, these states have already hit an iceberg. Water cannot be pumped faster than the gaping hole allows more water.

[inkling]

I’m sure a bankruptcy would have a bad effect here in Arizona. But who knows? Maybe some Golden State business leaders would choose to relocate in a slightly freer state.

[hinckley buzzard]

Most State constitutions have a requirement that the budget remain in balance. I don't know what the deal is with Collyforrnia but it would seem difficult for most states even to begin to get so deeply in hock, much less go bankrupt.