KEVIN WILLIAMSON: States Should Not Receive Bankruptcy Protection.
Mitch McConnell believes he has hit upon a solution for states that are upside-down on their pension obligations and other financial commitments: “I would certainly be in favor of allowing states to use the bankruptcy route,” he told Hugh Hewitt on Wednesday. “It’s saved some cities, and there’s no good reason for it not to be available.”
* * * * * * * *
Eventually, the political problem becomes a math problem, with the states obligated to spend more money than they have or can borrow. Even the Supreme Court of Oklahoma cannot produce blood from a stone.
The most likely way forward — the only plausible way forward short of gutting the Constitution — is for states to engage in a long, painful, disruptive negotiation with their creditors, their pensioners, and other interested parties. There will be endless lawsuits, unpopular budget cuts, unpopular tax hikes, and much else that is designed to make no one happy except for the lawyers. (The lawyers always get paid.) But these are the decisions the democratically elected representatives of the people of the several states have made, and they will have to live with them.
Call me an optimist, but: The more it hurts, the less likely they are to repeat the error.
I’m not at all sure about that – Amity Shlaes’ new Great Society book is a reminder that politicians sure love spending their as much taxpayer money as they can get their hands on, whether it’s good times economically, or bad.