On Aug 11, 2010, at 9:31 PM, Max Sawicky wrote: > States as sovereign entities cannot go bankrupt and cannot be sued > for default; that is my understanding, possibly wrong. But if they > want to borrow in the future they dare not default...States will gut > their budgets before defaulting on GO debt, since if they did > default, their borrowing costs would increase, perhaps to a > prohibitive level.
States are supposed to balance their budgets, nicht wahr? So if they normally run a primary surplus (ie., excluding debt service) why would any state with the guts to adjust its tax rates properly ever need to borrow again after default (even given that National Income would be doing well just to remain stagnant over the next several years)? Shane Mage "All things are an equal exchange for fire and fire for all things, as goods are for gold and gold for goods." Herakleitos of Ephesos, fr, 90 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
