When states, counties, cities, and other governmental entities need money, they can levy taxes or they can sell bonds, namely “municipal bonds.” One of the attractions of muni bonds is that they are often tax exempt and are seen as less risky than stocks. Unlike stocks, bonds are a type of debt. In the fourth quarter of 2016, the muni bond market in America totaled $3.8337 trillion. That’s $3.8T of debt. Munis are sold to pay for capital improvements, such as for roads, sewers, airports, and other infrastructure. Such legitimate functions of government could also be funded by raising taxes, but raising taxes carries political risk. In addition to the usual functions of government, municipal bonds are also sold to raise funds for “private” development, such as for shopping and entertainment, like the Zona Rosa shopping district here in Missouri. On March 20, the Kansas City Star ran “Zona Rosa in default on mortgage; Platte County residents may...(Read Full Article)