You’ll have to wait for a link to Money magazine’s interview with Carmen Reinhart, co-author of the book This Time It’s Different: Eight Centuries of Financial Folly.
In the meantime, I can share that Reinhart tells the magazine: “Historically, the recovery process from a severe financial crisis has been very protracted.”
Reinhart also tackles a topic John Hood has examined in depth: states’ financial crises:
State and local governments are really hurting. If you have a recovery that is lackluster and you add a depressed real estate market [which hurts property tax revenue], it’s not difficult to see why defaults would become more likely. In the history of the U.S. we’ve had two waves of state defaults — in the 1830s and again in the late 1870s — so they’re not unheard of. But I don’t think that’s a probable scenario. I think the federal government would fear contagion and would do whatever was required to prevent state defaults from happening. Defaults by cities, on the other hand, are quite probable.
