Many states have huge financial holes that could lead to a systemic crisis, experts say.
Budget deficits run into the billions of dollars in California and New York. States have taken on huge debt loads, many face shortfalls in their pension funds, and many are using accounting tricks to hide their true position.
The difficulties have faded to the background as the municipal bond market has surged. But if investors start to shy away from municipal debt, a crisis could rage at some point soon.
“If we ran into a situation where one state got into trouble, they’d be bailed out six ways from Tuesday,” Harvard economist Ken Rogoff told The New York Times. (more)
No comments:
Post a Comment