The state of state economies
Oct 6, 2020
Episode 293

The state of state economies

More coronavirus relief is a month away, at least. How will state and local economies fill their $155 billion deficit in the meantime?

President Donald Trump pulled the plug on a coronavirus relief package Tuesday, tweeting that he would sign a bill after the election.

For months now, Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin have been going back and forth over a plan, with as much a $1 trillion difference between their proposals. One key issue: help for state and local governments, which are facing a $155 billion deficit, according to Brookings Institution economist Louise Sheiner.

“State and local governments mostly have balanced budget requirements, so they are not allowed to borrow to finance their operations,” Sheiner said. “When revenues fall, they have to make it up somehow — either by raising taxes or much more likely by cutting spending.”

On today’s show, Sheiner will walk us through the role state and local economies play in the larger economic picture and what their needs are in a recession that looks very different from 2008. Finally, we’ll ask her: How worried should local workers be right now?

“Well … so much depends on the election,” Sheiner said, with a laugh.

That ended up being quite prescient — about an hour after we taped this interview, Trump announced there would be no aid deal until after Election Day.

Later in the show, we’ll talk about vaccines, K-shaped recoveries and what it means to get “Zucked.” Plus, Broadway producer Eva Price answers the Make Me Smart question.

When you’re done listening, tell your Echo device to “make me smart” for our daily explainers. This week: Agatha Christie, Warren Buffet and haunted houses. Spooky. Also, don’t forget to subscribe to our newsletter! You can find the latest issue here.

Here’s a list of everything we talked about today:

Finally: We need your voice memos! Tell us what you think of the show or ask a question for Kai Ryssdal and Molly Wood to answer! Here’s how to do it.

None of us is as smart as all of us.

No matter how bananapants your day is, “Make Me Smart” is here to help you through it all— 5 days a week.

It’s never just a one-way conversation. Your questions, reactions, and donations are a vital part of the show. And we’re grateful for every single one.

Donate any amount to become a Marketplace Investor and help make us smarter (and make us smile!) every day.

The team

Marissa Cabrera Senior Producer
Bridget Bodnar Senior Producer
Tony Wagner Digital Producer