Special commentary by Dan Liljenquist for the Deseret News
For those of us who closely watch state and municipal finances, it’s clear that the bankruptcy hound is stalking many — far too many — state and local governments. Sadly, in most cases, both the leaders and residents of those states and municipalities that are on the verge of bankruptcy continue to delay the tough decisions necessary to avoid it. In fact, the larger the financial gaps have become, the less likely elected leaders are either willing or able to adequately address them. So far, states and municipalities have been propped up by ready credit markets, which snap up new bonds while largely ignoring other cascading debts, like chronically delayed infrastructure investments and catastrophically underfunded public pension systems. But eventually — and sooner rather than later — the math will no longer pencil, lenders will transition from lending to collecting, taxes will skyrocket, residents and businesses will flee and the “suddenness” of bankruptcy will be upon us.
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