Excellent NYT article on states’ debt woes. To be read with yesterday’s post: US TAXES TO INCREASE THE MOST IN DECADES
Some economists fear the states have a potentially bigger problem than their recession-induced budget woes. If investors become reluctant to buy the states’ debt, the result could be a credit squeeze, not entirely different from the financial strains in Europe, where markets were reluctant to refinance billions in Greek debt.
“If we ran into a situation where one state got into trouble, they’d be bailed out six ways from Tuesday,” said Kenneth S. Rogoff, an economics professor at Harvard and a former research director of the International Monetary Fund. “But if we have a situation where there’s slow growth, and a bunch of cities and states are on the edge, like in Europe, we will have trouble.”
Related posts:
- THE STATES OF THE UNION PART II
- States See Pickup in Tax Revenue
- States Sink in Benefits Hole
- States Face New Pinch as Stimulus Ebbs
- States Move to Cut Incentives to Businesses
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