Book Talk: In a Bad State

Please join the Lillian Goldman Law Library for a talk with Professor David Schleicher about his new book, In a Bad State: Responding to State and Local Budget Crises, commentary by Professor Taisu Zhang.

This event will take place on Thursday, November 16th at 12:10 PM in SLB 120.

**Online Registration is Required by November 13th**

Boxed lunch will be available for those who register at: https://bit.ly/49eE3VB 

About In a Bad State: Responding to State and Local Budget Crises:

What should the federal government do if a state like Illinois or a city like Chicago threatens to default on its debts? In a Bad State explores the history of, and theory behind, federal government responses to state and local governmental fiscal crises. It argues that federal officials face a “trilemma” when a state or city nears default, as they generally have three incompatible goals. Faced with such a crisis, federal officials want to avoid creating moral hazard in state budgeting, prevent macroeconomic distress, and encourage lending to states and cities to build infrastructure. But whether they provide bailouts, demand state austerity, or permit state defaults, federal officials can only achieve two of these three goals, at best. From Alexander Hamilton’s plan to assume state debts to the Supreme Court’s repeated efforts to address the “railroad bond” crisis of the mid-to-late nineteenth century, from “Ford to City: Drop Dead” to Detroit’s municipal bankruptcy case, federal officials have cycled through options, never settling on one type of response to the trilemma. In a Bad State then suggests some ways the federal government could ameliorate the problem of state and local fiscal crises by conditioning federal aid on future state fiscal responsibility, spreading losses across governments and interests, and building resilience against crises into cooperative federalism and tax programs. Taking these steps wouldn’t fix everything, of course, but they could turn a fiscal crisis in a major state or city into a painful but manageable problem, rather than an unmitigated disaster. David Schleicher, In a Bad State: Responding to State and Local Budget Crises (2023).