With rising taxes and poor stock returns many investors are moving to muni-bonds for 'guaranteed tax free income' no matter how poor the yield. That may not be wise. In Muni Forecast: Lots of Clouds Allan S. Roth reports:
In an interview, Rauh noted that when you also combine municipal and county unfunded liabilities and update to today's interest rate environment, the unfunded liabilities amount to $3 trillion to $4 trillion. MIT economics professor Robert Merton, a Nobel laureate, was quoted in the Financial Times as saying that $4 trillion is a minimum amount. By comparison, the total value of issued muni debt is $3.7 trillion, according to the Securities Industry and Financial Markets Association.
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