See btilly's comment that mentions them. There is a lot of chatter about bankruptcy. It's still just chatter, with a small number of exceptions. Let us all hope it stays that way.

Mind you, I'm not guaranteeing they'll all go away, but it won't take very many bankruptcies for your returns to go below inflation. (Or worse.)

I might invest in specific municipalities, if that's possible for a mere mortal investor, but I wouldn't think it's necessarily a safer assert class than anything else right now.

Here's one recent link (far from the only long-form article I've read; reminds me of some of the articles I read before the tech and housing bubbles burst):

http://www.city-journal.org/2010/20_2_municipal-bonds.html