http://online.wsj.com/article/SB10001424...70644.html

Not that the states were being particularly responsible anyway. But, it's going to get ugly.

Quote:Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future.

The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse.

(01-04-2010 10:17 AM)DrTorch Wrote:  http://online.wsj.com/article/SB10001424...70644.html

Not that the states were being particularly responsible anyway. But, it's going to get ugly.

Quote:Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future.

The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse.

I'm not sure that the stimulus made things any worse other than delaying what the state governments are going to have to do....that is either cut spending or raise taxes. My own personal preference is cut spending. I think that those state politicians that push for raising taxes will end up losing their jobs, except maybe in California. Californians seem hell bent on spending their way to financial collapse.

(01-04-2010 11:53 AM)Crebman Wrote:  I'm not sure that the stimulus made things any worse other than delaying what the state governments are going to have to do....that is either cut spending or raise taxes. My own personal preference is cut spending. I think that those state politicians that push for raising taxes will end up losing their jobs, except maybe in California. Californians seem hell bent on spending their way to financial collapse.

If I understand the articles, the Fed is making things worse by allowing states to put more people on their rolls, then taking away the states' ability to cut spending.

That leave only the option of raising taxes, which means more money being taken from potentially productive use, to go to paying gov't salaries and benefits.

Are we forgetting the unfunded mandate to put 30+ million people on Medicade? The states, such as Texas, that have a large population of uninsured and under insured will see higher property taxes.