In this credit crunch, corporations and consumers have gotten all the attention. But the credit crisis is also a really worrisome event for cities and municipalities. Consider Jefferson County, AL. It is on the verge of defaulting on an $84 million interest payment on its $3.2 billion in bond debt, reports the AP. Bankruptcy seems assured. This will rank right up there with the Orange County, CA, fiasco in 1994. I'm not sure we'll see a rush of similar defaults, but the costs of borrowing has soared. There are some definite short-term funding issues cropping up. In fact, many local and state projects are now threatened. Certainly, this suggests the far-reaching nature of the credit crunch. So much of the world runs on credit, and the spigots are off.  

For more:
- here's the article
- here's a New York Times article