Does "state going bankrupt" equal "federal takeover of state"?

[TreadSoftly]

Did I misremember or have there been governments in USA that DID go bankrupt and had the state take over?

With that logic, then going bankrupt amounts to having the federal gov't take over your state.

Is that the import of this? Am I missing something e.g. in charters for municipalities maybe there is a state takeover clause?

Comments are appreciated...

[guillaumeb]

1. States cannot go bankrupt.

They are sovereign entities. McConnell is simply trying to divert attention from the fact that the GOP is willing to allow people to die as long as he can remake the Federal Judiciary.

[lapfog_1]

3. However most states must run a balanced budget

this means drastic cuts in other state funded and run programs... public education being the top of the list, but other social programs to assist the needy and homeless too, not to mention cuts in police, fire, and other first responders.

[guillaumeb]

4. Very true.

And if these states with such requirements drastically cut services, this will increase pressure on politicians.

We saw that even in red state like Oklahoma, public worker strikes received much public support.

[roamer65]

7. That needs to end.

Canadian provinces can run deficits, so too should American states.

Also goes to show us that there would be more flexibility for northern border states in the Canadian confederation.

[guillaumeb]

2. In addition:

Why can’t states use the federal bankruptcy system to reorganize their debt?
“There are two reasons why state governments currently cannot use the federal bankruptcy system to reorganize their debt. First, the federal bankruptcy code does not allow—and has never allowed—state governments to declare bankruptcy. Since 1937, the bankruptcy code has allowed ‘municipalities’ to declare bankruptcy. The term ‘municipality’ is defined in the bankruptcy code as a ‘political subdivision or public agency or instrumentality of a state.’ This definition is broad enough to include cities, counties, townships, school districts and public improvement districts. It also includes revenue-producing bodies that provide services which are paid for by users rather than by general taxes, such as bridge authorities, highway authorities and gas authorities. But it does not include state governments.

https://www.csg.org/pubs/capitolideas/enews/issue65_3.aspx

[Girard442]

5. What McConnell wants states to do is blow off their pensioners and raid the pension funds.

It's all part of the plan to wreck the middle class.

On edit: Bankruptcy would also allow states to abrogate contracts with unions.

[alwaysinasnit]

6. One of the biggest aspirations inherent in allowing states to declare bankruptcy is to kill

public service workers' pensions. Republicans just don't like people to have any kind of security or safety net protections.