November 29, 2007 (LPAC) - U.S. cities are finding it impossible to raise funds through municipal bond offerings. The once virtually guaranteed, safe, tax-free investment into muni-bonds, assuring cities that they could raise funds for schools and development projects at a low interest rate, are now in deep trouble because of the credit crunch brought on by the sub-prime fiasco. The monolines - insurance firms like MBIA and Ambac which insure bonds - are now facing collapse, having no where near the capital base to cover the collapsing mortgage-backed bonds they insured.

Thus, cities like Miami, Chicago and Washington DC have been forced to pull bond offerings off the market, since their insurers are no longer trusted, driving up the interest rates they must pay.

LaRouche, briefed on this crisis in the cities, placed the blame squarely on the Congress, for refusing to solve the problem, by protecting homeowners and banks through the HBPA. While the Congress complains, entire communities and cities are collapsing.