Ya Learn Sumthin' EVERY Day

Everyone is well aware of California's perilous economic situation and there's been a LOT of talk about the state going bankrupt.  Which raises the question:  Can a state go bankrupt, as in legally?  From a short article in Slate:

Can a state declare bankruptcy? Can a country? 

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn't include states. (The statute defines "municipality" as a "political subdivision or public agency or instrumentality of a State"—that is, not a state itself.) For one thing, states are said to have sovereign immunity, as protected by the 11^th Amendment, which means they can't be sued. In other words, they don't need any protection from angry creditors who would take them to court for failing to pay their debts. As a result, states can simply borrow money ad infinitum.

Say the state can't make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state's debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors' committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state's budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)

There's much more at the link... and the "country" part of the question refers to Greece, which currently has debt exceeding 110% of its GDP.  That particular hand-basket has already arrived at its destination, if'n ya hadn't noticed.  And it's pretty danged hot in the streets of Athens and elsewhere around the country.