Minnesota state government shutdown!!

I have not seen much discussion on this. But the fact is Minnesota state government has shut down on Jul 1 2011.

The focus is on US Federal Govt. but state governments have already started shutting  down. People always believe that Federal government will increase debt ceiling and there is a very remote possibility of it not being increased forcing government shutdown and US default (for whatever little time).

But the same possibility was given to states as well. Minnesota becomes the first state to shutdown after it could not agree to take measures to balance its budgets.

Should the government role after the crisis be more libertarian paternalistic?

Vito Tanzi (Hon. President of International Institute of Public Finance) gives this nice speech on role of government after the crisis. The paper helps you think through the role behavioral economics principles could play in public policy.