I worked for a company that went bankrupt.
Bankruptcy comes in two flavors or "Chapters".
One chapter is the complete cessation of operations. Total liquidation.
Another chapter is "reorganization". Various stakeholders take different haircuts based primarily based on precedence, seniority and whether obligations are "secured".
Inefficient enterprises are terminated. Contracts are nullified. Viable enterprises are shorn of dead-wood and hardened arteries.
Central to this process is that the haircuts, terminations, nullifications and surgeries are performed in a court-of-law.
The same kind of venue where many of Trump initiatives that have blocked.
Given Progressive's great love of going to court, one wonders why they aren't rushing to have their flagship states (Illinois, Connecticut, California et al) preemptively rushing into bankruptcy.
Revenues are cratering as sales tax receipts go in the septic tank and incomes dive.
Pension plan assets are barely hanging on but will likely crater when companies (equities) report quarterly earnings. David Stockman observed that the stock market could easily lose half of its value.
On the liability side, unemployment insurance is bleeding rivers of money.
In finance, that covers everything: Income and Net Assets.
Most state employees are "working" from home or are laid off and nobody notices that they are gone. Did we really ever need them?
The first state that declares bankruptcy will set the template for the ones that follow. What are they waiting for? Surely letting a judge decide whether you have a job and what happens to your pension is far superior to letting legislatures sort out problems and governors execute the laws they write.