Raw Story: "$2 trillion municipal bond debt crisis could bring down 100 US cities, analyst warns"

[Xicano]

A new disaster is looming, according to a prominent market research analyst.

Meredith Whitney, a financial analyst who runs her own consulting firm and correctly predicted the major debt fallout of Citigroup, warned in a little-reported on interview Sunday that as many as 100 US cities face default on their municipal bonds.

Cities and states issue bonds to pay for public services. The trouble is that municipalities are no longer collecting enough in taxes to meet their budgetary needs. According to a 60 Minutes report Sunday -- which received almost no attention by the popular press -- US cities have spent nearly half a trillion more than they've collected in taxes, and face pension shortfalls of $1 trillion. Video of the CBS piece follows this article.

"Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told a CBS 60 Minutes' interviewer Sunday night.

http://www.rawstory.com/rs/2010/12/2-trillion-debt-crisis-bring-100-cities-analyst-warns/

"US cities have spent nearly half a trillion more than they've collected in taxes".

I am certain all those tax breaks for the rich -and- free trade outsourcing millions of good paying American jobs which paid taxes had nothing to do with it. The problem is with all these damn lazy pot smoking liberal hippie free loaders dragging down our economy. :sarcasm:

[roamer65]

1. The Fed will simply monetize their bonds...QE3, 4 ,5 ...and so on.

[LiberalFighter]

2. Important point

What if the state was responsible for the problems of the cities? By restricting the taxes available to the municipality? Or if voters made the decision via a referendum that screwed up everything?

[valerief]

3. Damn freeloaders who hate freedom.

:sarcasm: