The Conservative Case Against California Bankruptcy

High Water

Some leading conservatives, perhaps most notably Newt Gingrich and former Florida Gov. Jeb Bush, have argued for changing the law to permit states such as California to declare bankruptcy.

Then, at the conservative blog Flash Report, comes a rebuttal from a California conservative, Bill Leonard, a former member of the California State Board of Equalization. He writes:

"Bankruptcy is used by families and businesses when either their expenses exceed their incomes or more likely when their debts exceed their assets.  As big as California’s debt is there are a lot more assets to secure it.  Regarding expenses, most all of the California budget can be adjusted downward if there is political willpower to do so.  California does not qualify for bankruptcy."

Leonard also argues that bankruptcy isn't an effective instrument for breaking bad labor contracts, as many advocates of state bankruptcy assume.

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