Dept. of Worst-Case Scenarios | Bleader

Thursday, September 30, 2010

Dept. of Worst-Case Scenarios

Posted By on 09.30.10 at 11:57 AM

Sign up for our newsletters Subscribe

Reading about the Quinn-Brady debate and yet another bond downgrade reminded me that I'd been meaning to check out what happened to Arkansas, the only state that actually defaulted during the 20th century. The answer? They worked off federal money, but it wasn't good times:

In 1933, Arkansas defaulted on its bonds — the only state to do so during the Great Depression — and its state government essentially functioned on federal money for two years. It started digging itself out only when it passed a sales tax, and even then, the state had to stop building roads for 16 years.

Multiple states, meanwhile, defaulted during the mid-19th century.

Reuters's Felix Salmon argues that in a worst-case scenario states will get bailed out; it's municipalities that have the most to fear, not least from pinched state budgets. Salmon is working off a report by Meredith Whitney, who ranks Illinois as the second-most fucked state in the country: ahead of California, tied with New Jersey and Ohio, and just behind Michigan.

Tags: ,

Comments

Subscribe to this thread:

Add a comment

More by Whet Moser

  • —30—

    A farewell, and some favorite pieces from the Reader.
    • Jan 14, 2011
  • The Very Political Life of Bill Daley

    Bill Daley: lifetime centrist
    • Jan 14, 2011
  • The Hidden Hands

    The Hidden Hands

    In every successful campaign—and every dud—pros are masterminding and organizing from offstage. Meet the people behind six mayoral candidates.
    • Jan 13, 2011
  • More »

Agenda Teaser

Performing Arts
August 26
Performing Arts
Tempel Lipizzans Tempel Farms
June 19

Tabbed Event Search

The Bleader Archive

Popular Stories