Reuters has an interesting report today on U.S. states benefiting from an economic upswing, and now reaching a level of "financial prosperity they enjoyed before the recession." The recovery is "slow and uneven," according to the National Governors Association and the National Association of State Budget Officers, but revenue and investments are finally improving.
The report's caveats notwithstanding, the news is generally encouraging. It's an economic detail that often goes overlooked, but state cutbacks have been a significant drag on the economy in recent years. The Recovery Act stemmed the tide in 2009, but when stimulus money ran out, states, which do not have the luxury of running deficits, were forced to slash spending and public-sector employment, necessarily slowing the larger recovery.
As 2012 draws to a close, however, most states have picked themselves up, dusted themselves off, and are ready for a rebound. There's just one problem: federal austerity.
After years of budget cuts and sluggish recovery, states expect to see their revenues climb back to prerecession levels this year for the first time since the financial crisis hit. But even as some states hope to restore some of the deep spending cuts they have made, they face a new threat.
Washington's efforts to tame the federal deficit, state officials fear, could end up further whittling away the federal aid that states depend upon and weakening the economy as it slowly mends.
"What we're really seeing here is there is not enough money to make up for any federal cuts," Scott D. Pattison, the executive director of the state budget officers' association, told the New York Times. "What I've heard from the state budget people is that they've told departments and agencies in state government: Do not expect us to have the money available, even if we wanted to, to make up for federal cuts."
Given national priorities, the policy is backwards.
It gets back to a discussion we had last week. The current fiscal debate in Washington is not about creating jobs or growing the economy; it's largely the opposite -- Republicans are demanding that policymakers take capital out of the economy, not put investments in. President Obama hopes to reach debt-reduction goals in the most progressive and unobtrusive ways possible, but it's still a conservative conversation.
What states fear, in other words, is austerity, which by definition is intended to slow the economy, just as they're starting to see brighter days. Here's hoping Congress takes the fears seriously.
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Which states and why are they not blasting their representatives in congress?
Oh- you know its those parasitic states- the ones that take in disproportionately more federal dollars than they pay in taxes. Do you note a pattern with the highest ranked ratios of federal dollars spent versus taxes recieved?
You know, the takers. (Source)
Every state is doing better than they were doing during the recession. And better than they have since the end of the stimulus.
It's pretty simple, really. They cut their budgets because they had to, and now their revenues are up because employment is up.
It's not the tax rates primarily that scares them--it's the sequestration or other budget cuts on the Federal level that will cause them problems.
I was surprised that you show had nothing about Judge Colas and his ruling that Scott Walker's anti-union bill was unconstitutional. It seems especially relevant considering the Snyder/Michigan segment.
Addicting info's fb post was my favorite, just because I enjoyed the photoshop so much.
http://www.addictinginfo.org/2012/09/14/judge-colas-shows-cojones-cans-gov-walkers-anti-union-law/
Rachel did cover Wisconsin in the past in some depth. These are two different situations, though. While both had to do with unions, the MI bill is fundamentally different, because it outlaws mandatory paycheck deductions, while the Walker bill stripped a class of workers of their collective bargaining rights, which is what was unconstitutional.
The problem the states will have with the GOP is that they (the GOP) refuse to believe a strong middle class creates a strong economy. The GOP business model of the 80's has never worked and yet they can’t bring themselves to admit it. A true breakthrough will be when they do, but by then those who do will be independents or DEMs as they will have been forced out by the far right.
Ok simple solution: States get back what they send to Washington in revenue. There you go austerity at work and it gets at those nasty entitlement programs the republicans seem so worried about. Of course since red states seem to be the ones most heavily on the government teat well then let them deal with the fall out.
On a certain level I am beginning to adopt a very neitzschean political that is beginning to worry me...
"Be carful when you fight monsters, lest you become one"
I know. I worry about some of the positions I find myself taking these days. They run counter to my value system. My anger is making me more vindictive and brittle. I keep having to talk myself out of nasty ideas that suddenly feel justified.
Do you remember in Rachel's early years (maybe only her 1st) when she used to take a position on something and then have an expert on to "talk her down" from that position? I loved that segment!!
If only the federal government could very selectively make cuts, so that all those Republican/tea party/ red states could see austerity they've been clamoring for.
State austerity is passed on to the local level. Cities and counties will feel the pinch as well and we may see a rising tide of municipal bankruptcies as austerity filters through the system.
Sorry, Steve, I know that last line is intended as a joke but I really can't laugh.
What states recovering ?, Definitly NOT California, Illinois, NY, NJ or any other democratic party controlled(both state senate and house) states. The federal debt directly effects the states. The deficit has surpassed $1 Trillion in each of the last four fiscal years and public debt as a percentage of GDP is the highest since 1950. And as of yesterday the federal reserve will print another trillion and the current administration will borrow another trillion+. So where are the specifics of spending cuts by the current administration during these "cliff" negotiations ?
There's still those uninformed that believe spending cuts is the priority issue. WRONG! It's JOBs, JOBs, JOBs, but where has the Republican HOuse been since their takeover? See any bills to create more jobs? Their trickledown economics for the 98% to support the top 2% has ALWAYS been thier goal in the past 30 or so years, and we KNNOW it DOES NOIT WORK. Evidence: Look at the George W. years where he spent dollars for unfunded cut taxes, spent undfunded dollars for the Iraq war that we shouldn't have entered into becuase of lies from the administration on WMDs that didn't exist. The result, when Obama took over, the country was shedding ~800K jobs a month and we were in a recession, a Republican recession, I might add. Over 5M jobs have been created since, the unempoymwent rate is going down and the GDP is trending upward. Since cutting spending and austerity programs are not the answer, just ask Greek citizens. What the Repbulicans really want to do is to take us down the tubes like Greece with their austerity program of cutting spending and not increasing revenues from those that can best afford it, rather by raising tax rates for the 2%, cutting subsidies for the billion dollar industires that sock away moneis overseas evading paying their fair share of taxes. So how are jobs created? Well, you pay people a decent wage that would result in spendable cash, then when they spend, they create demand, and when demand is created businesses expand to provide the goods and services increasing jobs, and the cycle goes on and on; not the trickledlown economics that we've seen in the George W. years. So, you need to wake up, do some research and do your own thinking vice watching too much right wing ideologs who make millions off the uninformed. Use facts when deliberating and you'll come to the correct conclusions. Remember, garbage in - garbage out....
As for those states who are takeers, in that they recieve more moneis from tghe Feds than they contribute, look at their base and the thinking; austerity and spending cuts for the 98% and tax cuts for the 2%. The result: Many are the poorest in the country. Conclusion: The Republicans are a bunch of sick uppies....
There's still those uninformed that believe spending cuts is the priority issue. WRONG! It's JOBs, JOBs, JOBs, but where has the Republican HOuse been since their takeover? See any bills to create more jobs? Their trickledown economics for the 98% to support the top 2% has ALWAYS been thier goal in the past 30 or so years, and we KNNOW it DOES NOIT WORK. Evidence: Look at the George W. years where he spent dollars for unfunded cut taxes, spent undfunded dollars for the Iraq war that we shouldn't have entered into becuase of lies from the administration on WMDs that didn't exist. The result, when Obama took over, the country was shedding ~800K jobs a month and we were in a recession, a Republican recession, I might add. Over 5M jobs have been created since, the unempoymwent rate is going down and the GDP is trending upward. Since cutting spending and austerity programs are not the answer, just ask Greek citizens. What the Repbulicans really want to do is to take us down the tubes like Greece with their austerity program of cutting spending and not increasing revenues from those that can best afford it, rather by raising tax rates for the 2%, cutting subsidies for the billion dollar industires that sock away moneis overseas evading paying their fair share of taxes. So how are jobs created? Well, you pay people a decent wage that would result in spendable cash, then when they spend, they create demand, and when demand is created businesses expand to provide the goods and services increasing jobs, and the cycle goes on and on; not the trickledlown economics that we've seen in the George W. years. So, you need to wake up, do some research and do your own thinking vice watching too much right wing ideologs who make millions off the uninformed. Use facts when deliberating and you'll come to the correct conclusions. Remember, garbage in - garbage out....
As for those states who are takeers, in that they recieve more moneis from tghe Feds than they contribute, look at their base and the thinking; austerity and spending cuts for the 98% and tax cuts for the 2%. The result: Many are the poorest in the country. Conclusion: The Republicans are a bunch of sick uppies....
The states are looking at what is happening in Congress and it is highly improbable that the states are going to increase their spending in real dollars. In fact, those states with the highest debt (and the largest population) are going to continue cutting services and increasing taxes. The states know they cannot rely on funding from the federal government and anticipate there will be more cuts in funding on the federal level for the next few years. Even with more funding for Medicaid, the states are going to find it hard to expand the program since the federal government share will decline over a number of years. Next time you go to the DMV and have to wait a long time or your streets are not repaved on a regular basis, you will see the impact of funding cuts. People think that cutting government services and employees saves money. IT DOES NOT! The work to be done piles up because there are not enough people to do the work. And eventually, the state is forced to deal with staffing problems at a later time.
It may be time (finally) for the "tax receipt". Then people could see what their tax dollars actually buy. Everyone, includung me, would be amazed.
The connoisseurs had gone through one of the main epidemiological study of the market and held on a conclusion with the major impacts of debts and U.S. struggling over to get rid. And besides that it also mentioned the other countries that are also having major impacts on market and would be leading countries in future. Well here they are talking about Asian countries especially China which are having good hold on the market. MiniCredit