Fallout: The Financial Crisis

States are in dire financial straits

Steve Henn Oct 29, 2008
HTML EMBED:
COPY
Fallout: The Financial Crisis

States are in dire financial straits

Steve Henn Oct 29, 2008
HTML EMBED:
COPY

TEXT OF STORY

Kai Ryssdal: Right alongside talk of the bailout and interest rates in Washington, there’s serious discussion of another economic stimulus package. But this time it’s state governors and local officials wanting a helping hand, as Marketplace’s Steve Henn reports.


Steve Henn: When the House Ways and Means Committee asked the mayor of Trenton, New Jersey, to describe his city’s finances, Doug Palmer quoted Jack Nicholson.

Doug Palmer: The Truth! You can’t handle the truth.

The truth is Trenton is firing 10 percent of its workforce this year, including cops and firefighters — but the city still needs to pass a 43 percent tax increase to balance the budget. New York’s Democratic Governor David Paterson says the situation isn’t any better on his side of the Hudson.

David Paterson: We are cutting all we can.

But . . .

Paterson: The deficit is too voluminous for us to address.

New York State’s three-year projected deficit is $47 billion. This financial crisis has turned state and city budgets upside down from coast to coast. Paterson wants the federal government to fill the breach by increasing spending on infrastructure, Medicaid, food stamps and unemployment insurance.

But Gov. Mark Sanford said he doesn’t want another $150 billion in federal bailouts. He’s a Republican from South Carolina.

Mark Sanford: If you go ahead with this, the question, I think, ultimately has to be asked, “Who bails out the bailoutor?

Sanford estimated Congress has already borrowed $2 trillion this year trying to right the economy this year and it’s time to stop.

Sanford: I think that there’s some irony to borrowing more to deal with a problem that was ultimately created by excessive borrowing.

But at the end of the day it seems likely Congress will do just that.

In Washington, I’m Steve Henn for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.