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The state of things
Two separate reports out today paint a very dark picture for state budgets. One of them says without more federal stimulus money, states could bleed almost a million new jobs next year.
The Center on Budget and Policy Priorities says:
Presuming they will get no more fiscal relief, states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year. Mark Zandi, Chief Economist of Moody's Economy.com, recently warned that these state budgetary actions "will be a serious drag on the economy at just the wrong time."
Meanwhile, the Pew Center on the States' analysis points to a group of states that are in particularly dire straits. From CNN Money:
The 10 most troubled states are: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.
Other states -- including Colorado, Georgia, Kentucky, New York and Hawaii -- were not far behind.
The list is based on several factors, including the loss of state revenue, size of budget gaps, unemployment and foreclosure rates, poor money management practices, and state laws governing the passage of budgets.
So, in light of all the money that's gone to corporations during this recession and considering the economy's fragile condition, do states deserve more help? Or do they simply need to bite the bullet and cut, even if that means job losses?
I suppose it's the same principle as "Debt Consolidation", instead of having 50 bills you have just one.
This is why I can't believe in the notion of "Less Government makes everything magically better". What do you mean by "Government"? Federal? State? Local?
The nature of US States is such that there are inherent inequalities between each state, due to Government, Population, Resources, Etc. Within each state it's the same thing at the county level, some counties
The upshot of this is it might lay the groundwork for more stimulus if you can get enough state Governors to influence the Senate. If Govenors have any influence over Senators at all, which isn't very likely.
I can understand "Debt Consolidation" if you have student loans or a profitable business, but when you consider how much debt the states could push onto the federal government, it gets spooky. Around me, I see workers who are overpaid and under worked when compared to mechanization and workers in foreign countries. I don't see how the US will be able to overcome the debt that not only the federal government has taken on, but the debt that the states will push over onto the feds.
At this point, you are right. Less government would be a bad thing. Because there are so many people suckling on the government that any reduction would increase unemployment further. Overall, it's sad when the government is the only employer that is adding to it's roles AND turning into the biggest employer. Everyone can't work for the government. Or can they?
