Where do these states get the money to pay expenses week to week? Do they just stiff contractors for protracted periods? Are there still people and funds who buy their bonds? You would think at some point they will really really run out of cash.
“You would think at some point they will really really run out of cash.”
Yes, you would! I know several years ago, during the downturn, California was issuing warrants to their suppliers and contractors. Unfortunately, unlike Illinois, California does have a fairly vibrant economy at present, so like the Federal Government, it can paper over its burgeoning debt. But at some point not very far into the future, the can that the Feds and a lot of states has been collectively kicking down the road, will be so badly bent up, it won’t go any further.
That’s when it’s going to get interesting. That’s when the “payoff on the free lunch” will start, it isn’t going to be pretty, and a lot of people are going to be seriously hurt in the recovery process. That debt has the ability to scuttle our country.
From August...
https://prairiestatewire.com/stories/511528368-illinois-unpaid-vendor-debt-surpasses-8-billion