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From the Joplin Globe editorial page
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December 8, 2010
Other views: Fiscal warnings
The Norman Transcript, Norman, Okla. The Joplin Globe Wed Dec 08, 2010, 08:02 AM CST
— The massive deficit carried by the federal government has gotten considerable attention from congressional candidates. But less discussed is the massive debt load carried by state and local governments.
The New York Times says the same folks who were warning of the crisis in the subprime housing market are now throwing up flags over the state and municipal debts. If left unchecked, analysts fear that investors could stop lending money to the states with the weakest credit, setting off a crisis that could spread to stronger states, much like the turmoil in Europe has spread from country to country, the newspaper said.
Federal stimulus dollars have propped up many state budgets this past year but that is set to run out soon. Some analysts are predicting 2011 will be the worst year yet for states in the four- or five-year downturn budget cycle.
Some states are balancing their operating budgets by postponing payments made to pension funds. They are merely borrowing against future liabilities, gambling that the economy will get better before it gets worse again.
The Norman Transcript, Norman, Okla.
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