The protests in Wisconsin and Ohio have made us even more aware of the difficult choices that lie ahead when it comes to America’s fiscal challenges. Nowhere is the problem more real than at the state and local level, where according to the Center on Budget and Policy Priorities, 45 states and the District of Columbia are projecting budget shortfalls totaling $125 billion. Failure to repay these debts not only has huge implications for jobs and public services, it also presents severe implications for the municipal bond market.

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