Record State Budget Shortfalls Likely To Drag Down The Private Sector For Years
First Posted: 8/29/11 12:50 PM ET Updated: 8/29/11 01:08 PM ET
WASHINGTON — While the current economic downturn is often referred to as the worst since the Great Depression, today’s conditions are by some measures actually worse than they were during the depths of the 1930s. States are struggling to recover from the worst hit to their tax revenue in U.S. history. They have never before experienced a drop in tax revenue as steep as that of the past three years — not even during the Great Depression.
With the federal government’s economic stimulus money now gone and little political will in Washington to reopen the spigots, thousands of critical state and local government jobs — from teaching to transportation — remain are on the verge of elimination, along with other spending. And that’s bad news for both the public and private sectors.