Anyway, without access to bond revenue, state and local governments may not be able to proceed with planned projects (this is also true for other institutions like colleges and universities, I wonder if the U of O has already sold the bonds for the arena project...). And of course this all filters down, postponing or canceling planned projects further hurts the construction industry.
Oregon businesses face troubles without access to credit as well, temporary cash needs may go unfulfilled leading to layoffs, etc. In the medium and long term, lack of credit can postpone or scuttle planned investments, hurting future productivity and business growth. This also filters down - lower employment and lower wages. A global economic downturn might also depress one of the few bright lights - exports - in the Oregon economy these days.
Finally, Oregon households are having a hard time now accessing credit and may soon have a harder time finding jobs, getting raises, etc.
Now for the latest in bad news: The Dow closed lower than 9,000 today, showing just how big is the crisis of confidence on Wall Street. The TED Spread soared to another all time high today showing just how much banks are still worried about each other. And the Treasury is starting to think seriously about buying equity in the banking sector. This last one is a good thing in my opinion.
The good news? Is there any? Well, yes, the mortgage market is looking great. So go buy a house!