Most of the public was outraged when, during the financial crisis of 2008, Congress provided a massive financial bailout, including $70 billion of taxpayers’ money to insurance giant AIG and $80 billion to U.S. automakers General Motors, Chrysler, and Ford.

Even most politicians who voted in favor of the bailouts did so begrudgingly, in part because they considered it a way to contain the damage from arguably unforeseen circumstances.

By contrast, state and local governments have accumulated many trillions of dollars in debt with clearly foreseeable consequences.

If states want to make good on their obligations, many will have to drastically increase taxes, severely cut services, or default on their debts and lose access to credit.

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