The Weekly Standard has an article about a path for states to file bankruptcy. Glenn Reylolds pointed to it and raised it with a comment from Volokh Conspiracy that states that file for bankruptcy should loose their statehood.
I like that idea. For the simple reason that a state that drives itself into bankruptcy has proven itself unfit for self government. What I will never support is a bailout of anything the state owes to itself. My rules:
- Statehood is revoked. A state going bankrupt is not like a person going bankrupt. It invariably takes place over a long time with lots of people, including the People, involved and in spite of multiple layers of checks and balances including of course, elections. It should not be called a territory. It is unfair to territories that have managed to run their own affairs. They should be called Failed States.
- All state property becomes federal property. Parks, buildings, trucks, highways, you name it.
- The governor is replaced with a presidential appointee approved by the Senate.
- The legislature is dissolved and Congress has oversight. Yeah, this doesn’t exactly sound like an improvement, but the legislature more than any other institution is responsible for the state failure.
- Federal courts acquire jurisdiction over former state courts.
- Federal bankruptcy courts take over all jurisdiction of state finances and go about reorganizing and liquidating the state’s assets just like any other bankruptcy.
I’m not sure breaking up failed states before bringing them back into the Union is an advantage. If California were broken up into San Fransiscostan, LAstan and the Former Great State of California Minus the Other Two Stansstan, it would make two permanent Democratic Senators four permanent Democratic senators and two open senate seats. How does spreading the corruption improve things?
And no bailout. There is no reason why solvent states should be dragged down by a failed state. There should be punitive elements to this. The intentional failure of a state should not be rewarded. Not to the government politicos. Not to the public unions. Not to the people who voted stupidly for years.