There is a sad race underway between two fiscally-troubled states in the Union, where the state governments of both Connecticut and Illinois appear intent on becoming the first full US state to file for the equivalent of bankruptcy.
Just over a week ago, Connecticut took a strong step backward toward reaching that status first when all three major US credit rating agencies downgraded the state’s credit, which immediately made it more expensive for that state government to borrow new money by issuing new debt.
This week, however, the state government of Illinois, thanks to its unadulterated dysfunction, has stormed back into the lead by achieving something that no other state has: the lowest credit rating ever assessed against a state government! Bloomberg has the story:
Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a US state, as the long-running political stalemate over the budget shows no signs of ending.
This post was published at FinancialSense on 06/02/2017.