Financial implosion looms for many states, such as California, New York, and Illinois, to name a few. Some officials and financiers say the solution is to let states go bankrupt and force them and the federal government deal with the consequences.
Agreeing with that proposed fix are former Florida Gov. Jeb Bush and former House Speaker Newt Gingrich, a likely Republican presidential candidate in 2012.
Allowing states to declare for bankruptcy would create a “fair, orderly, predictable and lawful approach,” to aiding beleaguered state governments around the country, the two contend in a
Los Angeles Times opinion piece.
“Federal bailouts must come to an end,” they write. “Federal taxpayers in states that balance their budgets should not have to bail out the irresponsible, pandering politicians who cannot balance their budgets.
"Congress must allow a safe, orderly way under federal bankruptcy law for states to reorganize their finances,” Bush and Gingrich recommend.