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The obligations states are trying to avoid

Q

I read your response to the New York Times article on how policymakers are trying to figure out how states might be able to declare bankruptcy to relieve massive debt. The plausible case for state-level bankruptcy is more likely focused on unfunded pension liability, not current muni obligation/revenue matching capabilities. The bankruptcy poster child is General Motors. If GM were a state, would its name be General Motors?

J.S., New York

A

James A. Klotz responds:

We agree, but curiously, the press can’t seem to differentiate between these issues.

Feb 7, 2011

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