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When States Go Broke: The Origins, Context, and Solutions of the American States in Fiscal Crisis
The nineteenth-century English poet William Wordsworth famously defined poetry as the "spontaneous overflow of powerful feelings ... recollected in tranquility."1 By this definition, there is something a little poetic about the recent debate as to whether Congress should enact a bankruptcy law for states. In late 2010, as the extent of the fiscal crisis in many states became clear, a handful of commentators and politicians proposed that Congress enact a bankruptcy law for states.2 "If Congress does its part by enacting a new bankruptcy chapter for states," one advocate concluded with a somewaht hyperbolic flourish, California governor "Jerry Brown will be in a position to do his part by using it."3 These proposals met immediate, passionate resistance. One law professor denounced state bankruptcy as a "terrible idea."4 "[I]f we in fact create ... a state bankruptcy chapter," another critic testified to Congress, "I see all sorts of snakes coming out of that pit," as "[b]ankruptcy for states could — would cripple bond markets.'"5
This material has been published in When States Go Broke: The Origins, Context, and Solutions of the American States in Fiscal Crisis edited by Peter Conti-Brown and David Skeel. This version is free to view and download for personal use only. Not for re-distribution, re-sale or use in derivative works. © Cambridge University Press.
Skeel, D.A. (2012). State Bankruptcy from the Ground Up. In Conti-Brown, P. & Skeel, D.A. (Eds.), When States Go Broke: The Origins, Context, and Solutions of the American States in Fiscal Crisis, 191-213. Cambridge University Press.
Date Posted: 28 June 2018