States, Counties and Cities across America have dug enormous deficits and have been continuously rescued by the Federal Government. Many municipalities are labeled “deadbeats” for failure to pay bills. Suffering from lower tax revenue and increasing pension debts the problems are escalating. The biggest trouble this time is that Washington is not in a position to bail out these municipalities any longer.
"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," –Meridith Whitney
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From New York Times “InUncertain Times, Municipal Bonds Call for Caution”