First of all, if the USA is willing to save banks and let states fail then the purpose of this country has failed and we should just fold up shop and thank everyone for being a citizen for all these years. Second, we have the mechanism in place to avoid a Euro style crisis. Unlike the Europeans, who lack the proper tools to deal with their own crisis, the USA is fully united and established a central treasury long ago. The funding mechanism for crises is ready to roll should it ever be needed. If ever there was a need for a “Geithner Put” I have little doubt that this administration would utilize it. After all, no one fails in this “capitalist” world anymore. Third, we’re far more likely to see increased austerity measures (such as the tax increases in Illinois) as opposed to defaults. The credit crisis is still causing ripples across the world, but one thing it is not doing is turning the USA into Europe.
The entire piece can be read in three minutes and is worth a read if you own muni's or are looking to.