46 States Facing Greek-Like Budget Crisis
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: