The can has been kicked. The austerity has been implemented. The revenues have fallen. And as we see in the chart below, the pace of local government distress is accelerating. As has been made so clear in the past, defaults cluster; and sure enough it is starting, as tensions between unions and city managers become irreconcilable.
The pace of local government distress is accelerating...
[4]
Meanwhile budget gaps are increasingly in need of political solutions...
[5]
But the 'fiscal cliff' hinders any reality of a solution coming from the top...
[6]
Source: Morgan Stanley