The best policy is for the incoming Republican U.S. House to refuse to give the likes of California or New York a penny. A steadfast “No Bailouts” policy makes for better — and, perhaps, profoundly transformational — politics.

By J. Robert Smith at American Thinker

EXCERPTS:

No bailouts means that state politicians — mostly Democrats, but a fair share of Republicans — are going to have to explain the folly of featherbedding public employee and teacher pensions, runaway spending, and big government, all which are leading more than a few states to the bleak land of default. And make no mistake, state defaults are in the offing, with the tarnished Golden State and diminished Empire State of New York on the inside track.

Lately, what’s been floated is for Congress to create legislation that permits a federal bankruptcy procedure for states. This is a superior idea, and an essential tool in changing bad state politics. What a state bankruptcy procedure allows is for states to invalidate contracts, reorganize, and start over. What a state bankruptcy procedure doesn’t do is make Washington a sugar-daddy and budget bad guy.

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