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State defaults in the United States are instances of states within the United States defaulting on their debt. The last instance of such a default took place during the Great Depression, in 1933, when the state of Arkansas defaulted on its highway bonds, which had long-lasting consequences for the state. Current U.S. bankruptcy law, an area governed by federal law, does not allow a state to file for bankruptcy under the Bankruptcy Code. Certain politicians and scholars have argued that the law should be amended to allow states to file for bankruptcy.
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