The economic recovery from the Great Recession of 2008-2009 has been so slow and fitful that the last four years are now being dubbed the “great contraction.” Economic “experts” these days often don’t agree on much, but there is consensus that recessions caused by financial crises like this last one are long-lasting and hard to cure.
State and local governments have been deeply affected and their own financial uncertainties are feeding into the overall economic malaise. The loss of 700,000 jobs in the state and local sector over the last couple of years has offset much of the slow increase in total employment and is a depressant to purchasing power. Overall, the sector’s spending grew by less than 1 percent per year between 2008 and 2010, and is now growing by about 1 percent a year. Tax receipts in many states have not returned to the levels of 2008. Nonetheless, there are more spending (and tax) cuts on the way, as visions of smaller, downsized government are implemented.
To read the full, original article click on this link: State, Local Finances in a Global Economy
