ON-Lion Letter
Detroit recently became the largest American city in history to declare bankruptcy.  Many more cities teeter on the brink of insolvency.  Not since the Great Depression has America witnessed such grand-scale municipal bankruptcies.  A new book, The Global Debt Crisis:  Haunting U.S. and European Federalism, looks at this growing crisis and its implications for governance and federalism, both domestically and internationally.

The situation in Detroit is emblematic of other current sovereign and sub-sovereign fiscal solvency crises, from the streets of Vallejo, Calif., to those of Valencia, Spain.  These crises have major consequences for the intergovernmental structure of the United States and the European Union -- the largest and most-important federations in the world.  The people of Detroit may not realize that the group that will bear the burden of budget cuts -- public sector employees or bondholders -- has massive impacts on the entire federalist structure.

Ultimately, as the contributors to The Global Debt Crisis explain, the option for bailout or the circumvention of creditors has deep implications for competitive federalism as we know it.

The book results from a conference last year at Harvard University that was supported by The Lynde and Harry Bradley Foundation in Milwaukee. 

Its editors are Paul E. Peterson and Daniel Nadler.  Peterson is the Henry Lee Shattuck Professor of Government at Harvard and director of the Program on Education Policy and Governance at its John F. Kennedy School of Government.  Harvard Ph.D. student Nadler was a PEPG research fellow and is a visiting scholar at the United States Federal Reserve.
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