From federal to state government and local municipalities, grifter government on the brink

From:
Municipal Bond Market Crash 2011: Are Dozens Of State And Local Governments About To Default On Their Debts?
(The Economic Collapse) --

In the United States, it is not just the federal government that has a horrific debt problem. Today, state and local governments across America are collectively deeper in debt than they ever have been before. In fact, state and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. Once upon a time, municipal bonds (used to fund such things as roads, sewer systems and government buildings) were viewed as incredibly safe investments. They were considered to have virtually no risk. But now all of that has changed. Many analysts are now openly speaking of the possibility of a municipal bond market crash in 2011. The truth is that dozens upon dozens of city and county governments are teetering on the brink of bankruptcy. Even the debt of some of our biggest state governments, such as Illinois and California, is essentially considered to be "junk" at this point. There are literally hundreds of governmental financial implosions happening in slow motion from coast to coast, and up to this point not a lot of people in the mainstream media have been talking about it.

Fortunately, a recent report on 60 Minutes has brought these issues to light. If you have not seen it yet, do yourself a favor and click on the video below and spend a few minutes watching it. It is absolutely stunning.

In the piece, one of the people that 60 Minutes interviewed was Meredith Whitney - one of the most respected financial analysts in the United States. According to Whitney, the municipal bond crisis that we are facing is a massive threat to our financial system....

"It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy."

State and local governments across the United States are facing a complete and total financial nightmare. The 60 Minutes report posted below does a pretty good job of describing the problem but it doesn't even pretend to come up with any solutions...

Unlike the federal government, state and local governments cannot just ask the Federal Reserve to print up endless amounts of cash. If state and local governments want to spend more than they bring in, they must borrow it from investors.

If the municipal bond market crashes, and investors around the world are no longer willing to hand over gigantic sacks of cash to state and local governments in the United States, then the game is over. Either state and local governments will have to raise taxes or they will have to start spending within their means.

Most Americans have no idea what this would mean. For decade after decade, state and local governments throughout the nation have been living way, way, way above their means. If the debt cycle gets cut off, it is going to mean that many local communities around the nation will start degenerating into rotting hellholes nearly overnight.

We are already seeing this happen in places such as Detroit, Michigan and Camden, New Jersey but if the municipal bond market totally collapses we are quickly going to have dozens of Detroits and Camdens from coast to coast.

Let's take a closer look at some of the state and local governments that are in some of the biggest trouble...MORE...LINK