Municipal Default

Cities & states during the housing bubble (wisely, of course) assumed housing prices & tax revenues would go up forever so they could keep spending like drunken sailors (following the federal example). Now the cities will have to be saved by the states, which are already in steep deficits, so the feds will have to come to their rescue. (But that's OK because the Treasury is just flush with excess cash, right?)

DiCiccio Reveals Phoenix's Wasteful Spending

http://www.azcentral.com/12news/news/articles/2010/04/11/20100411phxemployees0411-CP.html

The article demonstrates how, just as Mayor Gordon installed a city sales tax on food suggesting that cops would have to be fired otherwise, Councilman Sal DiCiccio is revealing just how highly paid city employees are, draining lifeblood out of an economy that's already on life support.