Demagoguery and deranged shootings in Arizona have diverted national attention from the looming threat of municipal bond defaults–state and local government bankruptcies go hand in hand. This danger was identified months ago in a report by Meredith Whitney the report premise is that some governments will soon have difficulty funding transfers to local governments and given current out of control spending, approximately 100 municipalities will likely default.
On a scale of 1 to 10 we should count this threat as a level 10 problem and start ringing the alarms.
More here Next on GOP Agenda–Dealing with Bankrupt Cities & States –Townhall.com
Related: A Bankruptcy Law–Not Bailouts for the States –Wall Street Journal