New at Reason: Veronique de Rugy on the Municipal Debt Bubble

December 14, 2010

When state and local governments want to spend more than they collect in revenues, they issue bonds. Such bonds are a longstanding feature of the American landscape, going back at least as far as 1812, but during the last decade they have spun out of control, as states and cities have increased their borrowing to indulge in more and more spending on new stadiums, schools, bridges, and museums. They have even started borrowing to cover their basic operational expenses. And as Contributing Editor Veronique de Rugy explains, with cities and states now boosting their debts by 800 percent, a housing-like crisis looms.

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