By Paul Bedard, Washington Whispers
Forget the "tech bubble," the "housing bubble," and the "financial bubble." Washington is now worried about the state and local government "borrowing bubble." Congress worries that as already happened in California, states and cities will start running out of money, see their bond ratings hit, and come begging to Washington, throwing the economy into further turmoil. "Governments have been overspending at every level, are leveraged to the hilt. They've borrowed to the hilt," says Tom Davis, a former Republican House member who runs the centrist Republican Main Street Partnership. Unless deficits are slashed, he adds, bond investors are "going to put their money someplace else, and at that point you lose control."