Would that be a nightmare come true — or the only logical way out of the state's deep fiscal crisis?
For now the question is purely academic because federal law doesn't allow states to file for bankruptcy. But that could change if some conservative factions prevail in Washington.
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There is a move afoot to persuade Congress to pass a law expressly permitting any of the 50 states to seek bankruptcy protection, a right that municipalities now have in about half the states.
Proponents of the idea say they're doing California and other deficit-ridden states a huge favor. Given the severe budget shortfalls facing many governors and legislatures in 2011 and 2012 — and their massive unfunded employee pension and healthcare liabilities — the argument for bankruptcy is that it would allow a state to put everything on the table at once and plot a sustainable long-term financial recovery plan.
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