which state will go under first?

[william the wie]

The subject of default came up again with PR's problems and Greece's. For example IL has been in default of unbonded debt for an extremely long time so which state will go under first and why

 

[EatMorChikin]

Michigan will go first. That place is on life support as we speak.

 

[HereWeGoAgain]

Thats a very good question.......
Which states are the most in debt without the ability to pay the note?
But again thats a damn good question!
Will it be a dense population state that cant pay the bills?

 

[TheOldSchool]

Illinois has the worst credit rating of all the states. And it's so much higher than Greece's rating that they can't even be compared. If that's what your worried about.

 

[william the wie]

Thats a very good question.......
Which states are the most in debt without the ability to pay the note?
But again thats a damn good question!
Will it be a dense population state that cant pay the bills?

The latter I suspect. IL, NJ, NY and CT all have people from the financial sector who help gimmick the books and a heavy mob presence that reduces whistle-blowing. That is quite an effective strategy for day to day operations but reduces longer run effectiveness. For example Atlantic City is a periodic point failure for NJ and NY is highly dependent on NYC old school media and the branching out into new media does not generate anywhere near as many jobs.

 

[william the wie]

Illinois has the worst credit rating of all the states. And it's so much higher than Greece's rating that they can't even be compared. If that's what your worried about.

Considering that the IL canal secures state loans and IL has the lowest bond rating in the lower 48 that's an extremely weak argument.

 

[prison/con.net]

When one goes, the others will follow, in short order, cause the pols will try to prop up the fallen with more and more taxation of the others and with inflation.

 

[william the wie]

When one goes, the others will follow, in short order, cause the pols will try to prop up the fallen with more and more taxation of the others and with inflation.

Bank-run style contagion tends to be international in transmission. A flight to relative safety in the US dollar and munis would drive yields down to very low levels before the suicidal instincts of the yield whores kick in. At which point trillions of dollars would be lining up at the exits to go back to the high yields of Argentina. Greece, the Ukraine and of course Zimbabwe at which point even some states with sound finances might have to pass around IOUs for a couple of months and even marginally bad states could go under in a huge wave.

 

[Zander]

Illinois is a train wreck. New Jersey, Massachusetts, and Connecticut have huge debts. Hawaii is another state that is deeply in debt. And of course, California has it's massive debt.

Good times!

 

[william the wie]

I think we will see a drop in interest rates prior to the rapid domino fall but otherwise I have to concur Zander

 

[jwoodie]

Will the U.S. Treasury "invest" in State bonds to keep them afloat?

 

[william the wie]

Will the U.S. Treasury "invest" in State bonds to keep them afloat?

I have no idea

 

[Missourian]

Ranking the States by Fiscal Condition Mercatus

The Blue states are "to big to fail"...the Federal government will at least try to bail them out.

But if the Chinese stock market tanks, there may be no more money to borrow.

 

[william the wie]

Technically KY is a purple state but counting it as red is less likely to generate the usual tis/taint crap. That means 92% of the bad and worse states are D.

 

[Delta4Embassy]

Thats a very good question.......
Which states are the most in debt without the ability to pay the note?
But again thats a damn good question!
Will it be a dense population state that cant pay the bills?

It is a good question.

Think California. Drought will see to that. Only a viable prosperous state because of water. Once that runs out much of Cali reverts to natural desert.

 

[william the wie]

Thats a very good question.......
Which states are the most in debt without the ability to pay the note?
But again thats a damn good question!
Will it be a dense population state that cant pay the bills?

It is a good question.

Think California. Drought will see to that. Only a viable prosperous state because of water. Once that runs out much of Cali reverts to natural desert.

Drought induced fires is only one part of Cali's trifecta of doom. Even drought alternating with floods like Australia while very bad is OK if not subject to earthquakes. Mudslides shifting the weight above tectonic plates cause delayed earthquakes. This drought could end with a bang given the size of the el nino that could be record breaking if it keeps growing. Earthquake code increases vulnerability to storm damage and a serious tropical wave would just about wreck CA and an earthquake no more than two years later would cause much greater damage than expected.

 

[Treeshepherd]

California agriculture is a $42 billion industry, with at least another $100 billion in related economic activity.

That seems huge until you consider the gross state product is $2.3 trillion.

 

[william the wie]

Another risk to the left coast is the canal expansion and canal building in Central America. With knock on effects I suspect that CA logistics is a trillion in economic impact but most knock on effects and especially their magnitude can only be fully identified after the fact so I suspect that the figure put out is much, much smaller.

 

[HenryBHough]

If oil prices stay down Alaska will be first.

 

[william the wie]

If oil prices stay down Alaska will be first.

How much debt does it have?