U.S. cities need national bailout agency: Rohatyn | Industry Summits | Reuters

NEW YORK (Reuters) - The architect of the 1970s financial rescue of New York City said on Wednesday the federal government should create a powerful national agency to bail out dozens of floundering U.S. cities.

Felix Rohatyn, the chairman of New York's Municipal Assistance Corp. from 1975 to 1993, said at the Reuters Infrastructure Summit that policymakers should look to the Reconstruction Finance Corp. created in 1932 as a model to aid cities and states as they confront their biggest deficits in decades.
Today, scores of cities and states are running billions of dollars of deficits. Some have suspended non-critical services by furloughing workers to save money. California and New York state have raised taxes, unpopular steps in a recession.

Unlike the U.S. government, which can print money to close deficits, states and cities are required to balance their budgets.

Rohatyn said hard-pressed state and local governments should be temporarily allowed to run deficits instead of curtailing vital services.
Notice the bold part.

I hope this guys ideas never, ever get to government policy making ever.