Look Out Localities

This is going to be the toughest problem facing the economy over the next two or three years. All the local governments living off the teat of the booming real estate bubble have now made promises they won't be able to keep.

Says the AP:

"The three main sources of revenue for cities -- income tax, property tax and sales tax -- are all declining, the report warns. Meantime, health care, public safety and fuel are getting more expensive."

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