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A interesting comparison between New York City and the state of Illinois: New York City has been compelled to adopt and maintain GAAP-based budgeting since its near-bankruptcy in 1975.  That may well explain how spreads on New York City general obligation bond yields over risk-free debt have been so narrow, compared to what Illinois (and its taxpayers and citizens) are now shouldering.  Riskier bonds tend to have to pay higher yields, and adopting more responsible budget reporting can benefit challenged jurisdictions like Chicago and Illinois.

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