Across the U.S., investigators are scrambling to find out how much debt states and municipalities have taken on. The general answer is: far more debt than has been previously disclosed, often debt beyond legal limits and without required approvals. The debt is in the trillions.
There are sure to be some epic showdowns between (1) interest groups determined to collect everything politicians promised them and (2) taxpayers determined not to pay for other people’s problems – especially since many of the problems involve other people’s pension and health care benefits plans that are much richer than their own.
The interest groups include institutions holding some $3.5 billion of municipal bonds and labor unions representing most of America’s 19 million state and local government employees. What can we expect to happen? Forbes contributor Jim Powell provides 7 possible outcomes in his recent Op/Ed.