What will happen with the financial situation of state, local, and municipal governments? There is no question that some states are in bad shape, for example, Illinois, New Jersey, and California. Other states are better off. This question will become a bigger issue as the year goes on. Some argue that the financial situation of state and municipal governments is not a huge problem and can be handled. Others argue that this is a big problem that will become much larger.
We have not heard a single thing from Washington about what to do with this problem. My feeling is that the politicians are all hoping that the issue will just go away. In my opinion, it all comes down to the following; years of poor political leadership, corruption, unreasonable financial assumptions, greed, and lack of fiscal control have created the problem. Are more financial bailouts and larger budget deficits for our nation on the horizon?