McConnell suggesting states file for bankruptcy is about the stupidest thing I've ever heard

[FlyingPenguin]

Let me just explain for people who aren't investors, why the leader of the senate, encouraging states to file for bankruptcy, is madness and will guarantee a depression, and can't legally happen anyway without bipartisan legislation, which McConnell knows damn well.

One of the most stable investments - investments investors like me, 401k plans, pension plans, investment funds, etc - can rely on are municipal bonds - especially state bonds. Bonds are used by states and local governments to raise money for infrastructure. People buy bonds, they get their money back with guaranteed interest in a set amount of time. Bonds are almost as good as bank CDs, and pay slightly more interest but you have to wait a long time for the return usually. They are seen as very safe long term investments.

If a state files for bankruptcy (which states can't legally do right now unless laws are changed, which is not likely), it may not be able to pay off it's bonds.

CDs and bonds are what is providing a safety net right now to a rocky stock market.

Now most states will never want to do this anyway because if you ever default on your bonds NO ONE will ever buy your bonds again in the future.

I don't know if McConnell was having a senior moment, or was channeling Trump, or what, but it's just about the stupidest thing he has ever said, and he's not a stupid man. And it wasn't a very smart thing to say unless you want to make the markets even shakier than they already are.

[Genom]

He's gotten away with pretty much everything so far. So he is pushing and seeing just how far he can go.