Bankruptcy For States Hurts, But May Help Workers
In a recent radio interview, Senate Majority Leader Mitch McConnell suggested that instead of federal bailouts to help fund states’ employee pensions — which are even more stressed than usual due to the economic damage wrought by COVID-19 — Congress should give states the option of declaring bankruptcy. It’s a hardline stance, and bankruptcy is not something to take lightly. Still, we shouldn’t dismiss the idea offhand as merely an alternative to bailouts, or as some kind of punishment for fiscal troublemakers. In some specific cases, it may open the door for reforms that ...