"We all of us know down here that politics is a tough game. And I don't think there's any point in being Irish if you don't know that the world is going to break your heart eventually."-Daniel Patrick Moynihan, December 5, 1963
And yes if CA, NY or IL go bankrupt then you are in trouble, but as it stands now these states are relatively better off than Alaska, RI, New Mexico, Ohio and Mississippi. First then comes Illinois and New York and California are way down the list of the top 25 states in debt.
But it is a bigger problem than that if you ask me. The US as a whole is in deep debt as the right loves to point out, and on top of that the states are in deep debt as well. So it is a double wammy so to say waiting to explode if things go wrong. The US needs 3+% growth just to keep up it seems according to the article, and good luck on that.