The Primrose Path to…Bankruptcy


Inquiring minds are reading Instapundit.com’s David Skeel’s column promoting the idea to give states a way to go bankrupt:

“When the possibility is mentioned of creating a new chapter for states in U.S. bankruptcy law (Chapter 8, perhaps, which isn’t currently taken), most people have two reactions. First, that bankruptcy might be a great solution for exploding state debt; and second, that it can’t possibly be constitutional for Congress to enact such a law. Surprisingly enough, this reaction is exactly backwards. The constitutionality of bankruptcy-for-states is beyond serious dispute. The real question is whether the benefits would be large enough to justify congressional action. The short answer is yes. Although bankruptcy would be an imperfect solution to out-of-control state deficits, it’s the best option we have, at least if we want to have any chance of avoiding massive federal bailouts of state governments.”

This really is a fantastic article that should be read in its entirety. Please click on the link above.

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