$2tn debt crisis threatens to bring down 100 US cities

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.

Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery.

"Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told the CBS 60 Minutes programme on Sunday night.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

the states will either be forced to take them over...or forgo the taxes...WHAT A WIN WIN FOR THE BANKS!!!!

I don't believe anyone, other than Cheney, thinks they don't matter at all.

At the state, local and household level, where people can't print their own fiat currency, deficits are of primary importance.