Third-World States: California, Illinois

This is interesting.

...“[Mitch McConnell] is suggesting amending the bankruptcy code to allow states to go into bankruptcy court and go through a process the way that cities and other municipalities are able to do under a chapter of the bankruptcy code,” said Baker. “There are good reasons why states cannot do this and should not ever be able to do it.”

Baker continued, “States have residual sovereignty. Like the federal government, neither can be sued without their consent. That’s the nature of sovereignty. This proposal, if ever enacted, would finish off what’s left of federalism.”...

He goes on to 'splain that cities--which CAN go BK--are not sovereign; that's the distinction.

OK, then.  How to proceed?

...“The choice is not simply bankruptcy or bailout,” Baker stated. “There are other choices. We have had states in the 19th century that defaulted on their obligations. The state of Mississippi, and other states, have not paid off debts from the 19th century, but 20 years ago, Mississippi was shocked when it went into the international market to borrow some money to find out that the London bondholders still had them on a blacklist, and they couldn’t borrow money in the international markets.”

Baker went on,”California and Illinois need to be treated like the third-world countries that they are.”...

Heh.

...“Third-world states” should be treated “like Argentina,” advised Baker. He reflected on Argentina’s 2001 defaulting on its sovereign debt as a guide for how to proceed with states seeking an escape from their liabilities.

Baker said, “[Argentina] could not get any more money, and so what it had to do was go into the international market and borrow and waive its sovereign immunity, which meant it could be sued....

And when they default, sue 'em!!  Take a park or two, maybe a couple of nice highways....