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Extraordinary and sometimes crippling levels of debt have plagued American states in recent years. State officials are often bound by inherited obligations to their citizens and employees and frequently lack the resources to meet those demands. David A. Skeel Jr., a University of Pennsylvania law professor, suggests an innovative solution to the issue: enacting a bankruptcy law for states to restructure and resolve unsustainable state debts.
Critics, however, raise a number of concerns: Could a state bankruptcy impair bond markets? Is this an attempt to evade pension obligations to public employees? Would subjecting state finances to federal trustee supervision violate state sovereignty and principles of federalism?
Join the Federalist Society and AEI in this vigorous debate growing out of When States Go Broke: The Origins, Context, and Solutions for the American States in Fiscal Crisis, a just-released collection of essays edited by Skeel and Peter Conti-Brown.