"Bankruptcy is used by families and businesses when either their expenses exceed their incomes or more likely when their debts exceed their assets. As big as California’s debt is there are a lot more assets to secure it. Regarding expenses, most all of the California budget can be adjusted downward if there is political willpower to do so. California does not qualify for bankruptcy."
Leonard also argues that bankruptcy isn't an effective instrument for breaking bad labor contracts, as many advocates of state bankruptcy assume.