My intrepid Mercatus Center colleague Veronique de Rugy joins forces with GMU Law professor and bankruptcy-law expert Todd Zywicki to explore the pros and cons of allowing state governments to declare bankruptcy. A slice:
Ideally, states would try to right their fiscal conditions. Legislatures and governors would make the hard budget adjustments necessary for states to meet their obligations to the public, retirees, and bondholders. But it is apparent, especially for the most financially overburdened states, that doing so is neither politically feasible nor economically possible without severe cuts to public services. Like General Motors and Chrysler a decade ago, both of which descended into bankruptcy after decades of mismanagement, excessive labor and retiree costs, and poor performance, decades of mismanagement and short-term political decision-making by state governments have finally collided with economic reality.
The good news is that most people over age 65 who are in generally good health are unlikely to die or get severely ill from Covid-19. Data from Spain’s national antibody study show that about 92% of those infected from ages 60 to 79 have mild or no symptoms, and only about 6% are hospitalized. Three-quarters of people older than 90 have mild or no symptoms and fewer than 10% die.
It is impossible not to recognize the irony of these events. The silencers aren’t campus protesters but professional journalists, a class of American workers who for nearly 250 years have had a constitutionally protected and court-enforced ability to say just about anything they want. Historically, people have been attracted to American journalism because it was the freest imaginable place to work for determined, often quirky individualists. Suddenly, it looks like the opposite of that.
Arnold Kling is unimpressed with Brink Lindsey’s out-of-context criticism of libertarians. Here’s Arnold’s spot-on conclusion:
Every day the news brings us stories of Progressives on the march, tramping out of college campuses and into the larger society, bringing their cancel culture and their contempt for capitalism and freedom with them. Meanwhile, Trump-era Republicans reject free trade and fiscal responsibility. Is this the time for libertarians to berate themselves?
Careful self-criticism is welcome. But coming when liberty in America is at the lowest point in my lifetime, reading an essay [by Lindsey] that merely echoes the Progressives’ anti-libertarian slogans and slanders left me disgusted.