State Bankruptcy Option Is Sought, Quietly - NYTimes.com: "Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
This is the next step to the Federal Government, not going bankrupt - they would just print even more money before they do that- but losing credibility in the financial markets and others around the world. Once we lose confidence in the dollar (the only thing it has going for it), the collapse will begin. First it was personal bankruptcies precipitated by the mortgage crisis, then municipal debt. Now the States are in the same situation. We no longer manufacture goods, we import more than we export, and we spend more than we earn. We are our own worst enemies - and the real enemies such as China will take advantage of our weakened State.
