For those reasons—the specter of rising borrowing costs—states are now pushing back hard on the bankruptcy meme. On Monday, for instance, California's treasurer, Bill Lockyer, told reporters that bankruptcy is "a cynical proposal, intended to incite a panic in response to a phony crisis." He continued: "Killer bees, space aliens, and now it's the invasion of the bankrupt states." So the big worries about out-of-balance budgets remain. But the ones about bankruptcies need not—at least as long as politicians keep it out of the question.
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