After decades of gross mismanagement, government entities ranging from the City of Chicago to the State of California are clearly insolvent. Hoping for an eventual Federal bail-out, these institutions have used dubious financial assumptions to hide their dire situations. However, the COVID19 shock appears to have made a bailout more urgent and less likely. Where do the state and municipal debt crisis stand? What are the possible solutions? And what are the implications for investors, taxpayers, and creditors? We’ll explain.