"Cities and states have to stop borrowing to balance their expense budgets," he said. "It's not sustainable. It is coming to a crashing halt in more and more places."
If every local jurisdiction would match recurring expenses with recurring revenue, "you wouldn't have a growth in the number of cities that ultimately are going to face the default on their obligations."

Detroit, under the oversight committee and thereafter, will be required to report under GAAP accounting, which does not allow either funds from borrowing or funds from asset sales to be included in "revenue" for the purposes of balanced budgets. If this is enforced, Detroit will be at the leading edge of improving its fiscal health, as compared to most major cities in the country.

Ravitch said in his testimony that NYC is going through a real test this year: NYC is rolling out expensive new programs and retroactive wage increases. They have included borrowing to balance the budget, and some people have gone to the state to ask that their oversight committee [[which still exists) take action.

http://www.cnbc.com/id/101698390