State Budget Woes Canceling Out Federal Stimulus

By
Tuesday, June 15, 2010 at 12:56 pm

Via Ezra Klein, Bruce Bartlett argues that state budget shortfalls and ensuing cuts to staff and services clearly cancel out the federal stimulus and that “economists will view this as a preventable error equivalent to the Fed’s passive shrinkage of the money supply in the early 1930s.”

He elaborates with a number of data points in his Fiscal Times column:

A June 3 report from the National Governors Association and the National Association of State Budget Officers shows that the states have cut aggregate spending by $74.4 billion, or 10.8 percent, since 2008. The expiration of $55 billion in temporary federal aid to the states could lead to further substantial spending cuts beginning on July 1.

Budget expert Stan Collender warned on June 8 that a sharp cutback in state spending mandated by state balanced budget requirements could have a negative effect on the economy as a whole. [...]

A May 26 report from Pew reviewed the responses of 13 cities to the recession. Virtually all were enacting broad based tax increases as well as new fees, job cuts and reductions in pay and benefits for municipal workers. [...]

A March 5 OECD study examined the cyclical behavior of subnational governments throughout the OECD. It found that such governments in the U.S. behaved in a far more cyclical manner — exacerbating the business cycle rather than moderating it — than in any other major country. A February study by economists Joshua Aizenman and Gurnain Kaur Pasricha found that fiscal contraction in the states offset almost 100 percent of the fiscal stimulus at the federal level in 2009.

These data are as strong an argument as any for the passage of the jobs bill and other more aggressive measures to help boost demand and lower unemployment.

Follow Annie Lowrey on Twitter


Comments

28 Comments

Tweets that mention State Budget Woes Canceling Out Federal Stimulus « The Washington Independent -- Topsy.com
Pingback posted June 15, 2010 @ 1:06 pm

[...] This post was mentioned on Twitter by billiegirltoo, Jamil Smith. Jamil Smith said: RT @TWI_news: State Budget Woes Canceling Out Federal Stimulus – http://bit.ly/aULbLg [...]


Modern Turkey Hunting | Find Hidden Treasures
Pingback posted June 15, 2010 @ 3:29 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


The rush is on to use up infrastructure stimulus funding | Government Grants for Citizens
Pingback posted June 15, 2010 @ 4:38 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Same woes as classes resume | World University Information
Pingback posted June 15, 2010 @ 5:47 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


How to reset the toshiba laptop in Factory setting? | Best Toshiba Laptop Review
Pingback posted June 15, 2010 @ 6:14 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Criminal Justice Universities|University Of Criminal Justice
Pingback posted June 15, 2010 @ 6:24 pm

[...] State Budget Woes Canceling Out agent Stimulus « The pedagogue … [...]


The Mortgage Meltdown and Who Is Responsible - You Don't Have to be a Genius to Day Trade
Pingback posted June 15, 2010 @ 9:50 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Taxes to go up for Tuscarora homeowners | Health | safety | insurance
Pingback posted June 16, 2010 @ 1:52 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Mayodan approves budget without rate increases | Government Grants for Citizens
Pingback posted June 16, 2010 @ 1:56 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Bargain Deals and Money Management | E-Realty Bargains
Pingback posted June 16, 2010 @ 4:00 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Bask in the lap of luxury in the Baja – The Vancouver Sun | Bedroom furniture headboards Blog
Pingback posted June 16, 2010 @ 9:54 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


AT&T Cancelling iPhone 4 Pre-Orders; Ship Date Pushed to July 14th [Updated with AT&T statement] | Ocarina
Pingback posted June 17, 2010 @ 12:40 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Severe cuts in Illinois, thousands of people with disabilities may lose home help | Autism Experts Blog
Pingback posted June 18, 2010 @ 2:06 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


What supplies do I need to start oil painting? | Custom oil painting
Pingback posted June 18, 2010 @ 12:34 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington Independent [...]


State park preserves life of Thomas Hart Benton, family | Custom oil painting
Pingback posted June 18, 2010 @ 12:37 pm

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington Independent [...]


Legislators vote to overturn some budget vetoes | World University Information
Pingback posted June 25, 2010 @ 5:30 am

[...] State Budget Woes Canceling Out Federal Stimulus « The Washington … [...]


Bernanke on the States’ Budget Crises North Capitol Street
Pingback posted August 2, 2010 @ 1:56 pm

[...] gaps. Most make these up with rainy-day funds or bond issuance. But the severity of the recession has pushed some states close to insolvency. They are making up the gap by doing everything from turning off [...]


House GOP Spending Plan Would Force States To Make Deeper Cuts In Education, Housing, and Transportation : South Capitol Street
Pingback posted November 12, 2010 @ 4:34 pm

[...] states have been a substantial drag on the economy. In fact, cutbacks at the state and local level basically offset the effect of the American Recovery and Reinvestment Act, so that little net money was pumped into the [...]


wheeled duffelred size
Trackback posted August 26, 2011 @ 1:33 am

carrier luggage basket…

[...]while the sites we link to below are completely unrelated to ours, we think they are worth a read, so have a look[...]…


sabena fridge magnet
Trackback posted August 26, 2011 @ 10:26 pm

hat cookie cutter…

[...]just below, are some totally unrelated sites to ours, however, they are definitely worth checking out[...]…


Quickest Way to Lose Weight
Trackback posted August 31, 2011 @ 4:40 pm

Amy Winehouse…

[...]these are a couple of references to web pages I always link to for the fact we think they will be worthy of browsing[...]…


Taylor Lautner Workout And Diet Plan
Trackback posted September 2, 2011 @ 2:16 am

Taylor Lautner Workout…

[...Also you might wanna' check out this blog I found here...]…


mmo browser game
Trackback posted September 3, 2011 @ 8:54 pm

free strategy games…

[...]the time to read or visit the content or sites we have linked to below the[...]…


ecommerce solutions
Trackback posted September 4, 2011 @ 9:50 am

Ecommerce devlopment for business…

[...]below, are some totally unrelated sites to ours, however, they are definitely worth checking out at least once[...]…


Payday Loans Houston
Trackback posted September 5, 2011 @ 10:16 am

Fast Cash Advance…

[...]if this issue is normally important to you, you could possibly enjoy this internet site[...]…


Tahari Petite Suits
Trackback posted September 6, 2011 @ 9:54 am

Miss America 2011…

[...]below are a handful of url links to places I always link to for the fact we think they really are worth visiting[...]…


טיפטים
Comment posted September 7, 2011 @ 4:44 am

היי קבלו אתר בנואים פי.וי.סי, עיצוב הבית, מדרגות מעץ. מומלץ מאוד!


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.