46 States Facing Greek-Like Budget Crisis

Monday, June 28, 2010
By Paul Martin

Joe Weisenthal
Jun. 28, 2010

It’s not just California, Illinois, and New York.

According to the Center on Budget and Policy Priorities, 46 states are facing a severe “Greek-like” debt problem.


Even as the U.S. appears to be on the mend — gross domestic product has climbed three straight quarters — finances in Arizona, Illinois, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution. State spending is 12 percent of U.S. GDP.

A failure to bail out the states will result in a slashing of GDP, and naturally more job losses.

While the whole “Greek-like” concern sounds a bit overdramatic, this issue of the states is clearly among the more pressing short-to-medium-term questions facing the economy. Regardless of the shape of the recovery (“V”, “W”, “square-root shaped” etc.), it’s obviously not been robust enough to return state tax revenues back to pre-bust levels. In many cases, it’s not even close.

The Center on Budget and Policy Priorities put out this chart, just looking at the jobs picture:

The Rest…HERE

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