USA TODAY: …State and local spending is down 0.8% this year — a 2.7% drop when adjusted for inflation — to an annual rate of $2.4 trillion, a USA TODAY analysis of Bureau of Economic Analysis data found. New budgets, which take effect July 1 most places, show elected officials continuing to restrict both spending and tax hikes.
The biggest savings are taking place at the local level, prompted by cuts in state aid to schools and cities. Michigan replaced $307 million in general aid to cities with a $200 million program that must be used to improve efficiency. One result: Grand Rapids, Flint and Lansing will use the money to merge tax collection operations….
The pullback has trimmed 662,000 state and local jobs since August 2008, about 3%. Construction spending — such as schools, parking garages, rest stops — is down 10%. Borrowing has fallen. Even Medicaid, the health care program for the poor, has been trimmed since extra federal aid ended last July… (more)
EDITOR: What a way to fight a deep depression: Fire people and put them on the public dole. Deprive our children of the quality education and development needed to compete in the world economy! Of course the right wing Republicans in the federal government are the ones to blame since the states and cities are mandated to balance their budgets. Under the American Recovery Act funds were made available to maintain state and local work forces until 2011.
Worried about the federal deficitg and ballooning national debt? When people are back at work and paying rather than consuming taxes, the budget will be more than balanced and dthe national debt paid way down as occurred after World War II and during the Clinton years.
