Thursday, December 6, 2012

Cities and States Test Fiscal Limits

Steven Malanga, RealClearMarkets
Illinois' reputation as the incorrigible outlaw of state finance has continued to grow throughout the fall. In mid-October, a fiscal study group co-chaired by former Federal Reserve Chairman Paul Volcker issued a stinging assessment of the state's finances which argued that Illinois is effectively insolvent.But what is perhaps more startling is that other states and many municipalities have increasingly employed the same kinds of gimmicks as the Prairie State to create the illusion that they are balancing their books. Although this maneuvering fools fewer and fewer people as the...

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