This week both New York City and Maryland's Prince George's County sold bonds subsidized by the February federal stimulus package. Bond blogger Accrued Interest poses a bond wonk's version of a zen koan: Assuming both paid the same interest yield, which is the better deal? Ie., which municipality is less likely to default?

Accrued Interest chooses PG, and here's partly why:

I like Prince George's better. First, much of the County's employment is based around the Federal government, which is the one part of the economy that is still growing. New York on the other hand is in the eye of the storm in terms of finance lay-offs. But more importantly to me, New York has a more complicated budget.

In reality, neither is likely to actually miss any bond payments. So the risk is a California-style budget battle, where the situation is unresolved for months and months causing spreads on bonds to widen dramatically. Isn't that much more likely to happen in the Big Apple? Prince George's just doesn't have a complicated enough budget to create this kind of problem. New York does. Hell, New York has gone through such budget battles multiple times in the past.