States and cities often have balanced budget laws. Even if these were repealed (look how easy that has been for the Eurozone), states do not have the mechanism for bankruptcy (see: Puerto Rico). And cities have one but it can get extremely messy (see: Detroit, New York in the '70s)

The feds have decided to prioritize the economy in an election year, for some short-sighted definition of a good economy. And the party in power has never liked a strong federal government anyways.

My question was regarding the federal government's involvement. I can't fathom why they would let so many people die, unless we elected hundreds of sociopaths to federal office.