The New York Times shines light on the unsurprising trouble state and local governments are having issuing new debt:

“Analysts said the dysfunction in the municipal bond markets appeared to signal the end of an era of relatively cheap money for governments and, probably, the start of an era of tough choices for communities.”

It’s about time. As the following chart shows, state and local debt outstanding has almost doubled since 2000:

Says the Times article:

Municipalities will probably be able to function, but may not expand services, said John V. Miller, chief investment officer at Nuveen Asset Management, a municipal bond investment firm. “For some, the level of service they provide will decline.” Some governments, already straining to balance their budgets, will have to cut payrolls, he said, and others may decide to raise taxes.

Raise taxes?

Bureau of Economic Analysis figures show that total combined state and local expenditures have risen an average of 5.8% a year since 2000 — an overall increase of almost 50%. Taxpayers shouldn’t get stuck with the hangover that inevitably results from politicians binge-spending while the party was good.