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State, Local Governments Borrow at Record Levels: Q3 2005
Posted By John Schroy On 12th February 2006 @ 13:06 In Municipals, Individual Investors, Government Officials | Comments Disabled
The Federal Reserve Flow of Funds [1] Table F211 for Municipal Securities and Loans, shows that state and local government are issuing long-term bonds at record levels.
The main purchasers of municipal bonds are domestic individual investors that benefit from tax exemptions on municipal bond interest. The largest institutional purchasers are property-casualty insurance companies and money market funds.
The graph shows that total liabilities have increased since 1995 with much of new municipal debt being financed by the household sector.
![]() Individuals Hold Government Debt
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The rate of increase in borrowing by State and Local Governments has more than tripled since 2000.
Foreign investors are not significant players in this market.
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[1] Table F211: http://capital-flow-analysis.info/flow-of-funds/F211.htm
[2] bond market: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=bond-market
[3] foreign investors: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=foreign-investors
[4] households: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=households
[5] money market funds: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=money-market-funds
[6] munis: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=munis
[7] state and local government: http://capital-flow-analysis.com/capital-flow-watch/index.php?tag=state-and-local-government
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