Thought exercise:
Assume that it is the job of Federal government to act as an insurer of last resort against bankruptcy of the States. Likewise, States to act as the last resort for Counties, Counties for cities and municipalities.
How should such a system be constructed? If there is an insurance like program, would the higher level insurer require that there be first an external or commercial insurance? Would there be payment requirements from the lower bodies being insured? Would there be fiscal constraints imposed on the lower entities? Could such a system be used to contain government at the local and state levels?
What would be the unintended consequences of such a system?
Assume that it is the job of Federal government to act as an insurer of last resort against bankruptcy of the States. Likewise, States to act as the last resort for Counties, Counties for cities and municipalities.
How should such a system be constructed? If there is an insurance like program, would the higher level insurer require that there be first an external or commercial insurance? Would there be payment requirements from the lower bodies being insured? Would there be fiscal constraints imposed on the lower entities? Could such a system be used to contain government at the local and state levels?
What would be the unintended consequences of such a system?
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Don’t even GO there man! Don’t give them any ideas! My first thought was: I smell a TAX and another bloated Federal Agency!