Senate Majority Leader Mitch McConnell recently floated the idea of changing federal law to allow states to take bankruptcy.
Such a recourse, the Republican leader said, would be preferable to asking the federal government to bail out states suffering from the revenue repercussions of COVID-19 shutdowns.
Actually, legalizing state bankruptcies is a terrible idea. It would drive up borrowing costs for highways, schools and other public infrastructure because those who buy government bonds could no longer assume they are risk-free. Plus it would overlook one salient point: The states have the power to tax, which means they have the power to cover their shortfalls.
It might not be politically attractive to raise taxes during a deep recession, but this is the pickle the states willfully chose when they decided economic suicide was the lesser of two evils.