State and Local Debt Issuance at Low Level.

• Position: Brief Article - Statistical Data Included

In August, the total amount of long-term debt issued by state and local governments dropped to $14 billion. That is the lowest level of long-term issuance since February 1997. Following a peak of $30.9 billion in June 1998, long-term municipal debt issuance has declined approximately 50 percent. A similar cycle occurred six years ago when debt issuance peaked at $31.1 billion in June 1993 before declining. The peaks in debt issuance in 1993 and 1997 both coincided with a decline in interest rates, suggesting that governments increased their borrowing because they recognized that...