Cities and States Large Borrowing Causes Concern
Municipalities and states have borrowed far more this year than in the recent past, which is fueling concern.
"Where is all this tension about municipal bankruptcy and muni bond defaults coming from, and why? It's true that state and local debt is at an all time high. State and local governments have borrowed $2.4 trillion as of mid-2010, according to the Federal Reserve. That's an increase of 35 percent in the past five years. It's also true that several European countries, such as Greece and Ireland, have been on the verge of defaulting on their loans. Does that mean it can happen here?"