I think such a bailout would result in the collapse of the USSA with most of the Democrat controlled states (which are constantly bragging about how rich they are) requiring a bailout from the rest:
At the heart of it all is the so-called Blue State model of governance of the Democratic Party. It views government as an ever-expanding and always-available ATM to meet all needs, social and otherwise, with a ready supply of taxpayer cash.
This includes lavish underfunded public-employee pensions, which have created massive fiscal problems for many states across the country.
A study by Moody’s Investors Service last year found that net pension liabilities continued to soar in 2015, the latest year for which data are available.
“Total U.S. state aggregate adjusted net pension liabilities totaled $1.25 trillion, or 119% of revenue for the 2015 fiscal year,” the report said. As bad as that is, Moody’s also predicted that the amount of unfunded liabilities at the state level would soar 40% to $1.75 trillion this year.
It wouldn’t be so bad if the states were responsibly addressing the problem. But they aren’t. A new study out this month from North Carolina State University finds that states are using a variety of tricks and gimmicks to paper over their financial liabilities and to fool taxpayers about the true extent of what they owe. It’s a dangerous game.
And it’s unsustainable. To paraphrase the late economist Herb Stein: If something can’t continue, it won’t.
The problem is, an implicit part of the Blue State model of governance is that it’s never anyone’s fault, other than stingy taxpayers, when a state falls into arrears or begins showing chronic deficits. It won’t take long for states to adopt the same attitude that some banks have had: “We’re too big to fail. Time for a federal bailout.”