To the Editor:
Recently, Senate Majority Leader Mitch McConnell’s comments have become as loopy as our President’s.
For example, McConnell suggests that states consider filing bankruptcy to accommodate the enormous financial drain resulting from the COVID-19 pandemic.
States are not permitted to file bankruptcy. It’s the law. One solid reason for the law is to assure states’ creditors that a state may not walk away from the obligations it sells. Creditors rely on this to give states preferred interest rates compared to other bond sellers.
The result of McConnell’s suggestion is that, on top of everything else coming out of this COVID-19 pandemic, states would have to increase taxes to pay higher bond interest rates.
It’s hard to believe that the Senate Majority Leader doesn’t know better.
Michael G. Busche