We are all becoming Greece at different rates. The PIIGS and Japan are in line ahead of us and the states are getting in line…California, New York, Illinois. We will get to watch them collapse one at a time.
When time comes for a bailout for these states, taxpayers will revolt. Fiscally responsible states will stand their ground and refuse to pay. An economic civil war will break out. No shooting…but a battle between small gov and big gov…and a battle to restore states rights. Washington takes all your money and then makes you jump through hoops to get it back in highway funds and education and bailouts.
Texas, or a similar state, will declare the IRS “null and void” in their state. They will agree to pay Washington for defense but most of the rest, they will tax and handle themselves. That’s how the constitution specifies it and this fiscal crises could be what finally brings the independence of the states back to favor.
Keep in mind, 100 years ago, there was no federal income tax and no transfer payment social programs. These were considered unconstitutional. Charity was done locally, schools were run locally. Nobody sat home and got a check from Washington.