The States Need Help

Tags: Economy, Politics, Credit, Crisis, Bailout
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Wall Street’s crisis is walloping state finances across the country. The most urgent problems are in states — like California — that rely on short-term financing to help pay their bills until tax revenues start coming in later on in the fiscal year. This is about the safest debt on the market. Still, over the past few weeks, states have been shut out of the credit markets like everybody else.

Washington must step up. To start, the federal government must help states like California and Massachusetts get past their short-term liquidity squeezes. Congress also must prepare a new stimulus bill, with bolstered aid for food stamps and assistance to states and cities so they can continue to provide health care and finance construction and other projects that provide jobs.

In 2003, Washington gave states $20 billion in grants and increased Medicaid contributions to help them dig out of the 2001 recession. We hope this time it will act a lot faster.

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Type: Discussion • Score: 5 • Views: 426 • Replies: 9

@Robert Gentel,

Hey Robert, are you also Craven?
Not that I need to know, of course.

McT x

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@McTag,

Yeah, I wanted to post under my real name, and had wanted to post without site role baggage. The latter didn't work out so well but I've done a remarkable job on the first wish.

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@Robert Gentel,

Remarkable job is right.

Britain has similar, very deep and unprecedented, financial problems yesterday and today. As does every other European financial centre.

Downing Street are desperately trying to stem the tide, markets haemmorrhaging money. Icelandic e-bank (with 300,000 British customers) has closed its e-doors.

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@McTag,

McTag wrote:

Remarkable job is right.

I'm pretty proud of myself, I get my name right every time!

Is there any reaction on the street to the 84B plan yet?

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@Robert Gentel,

And Massachusetts voters are about to vote on repealing the state income tax (on top of all this).

I think people believe that government (state and federal) is extremely wasteful of the taxes they take. And I think they are right. But how do you get the higher-ups in government to fire their lazy cousins and drop their pet projects and use the money to fix roads and bridges? Everything depends on the integrity of the people in government. So how does everyone feel about the integrity of the people running those offices? If we give them less to work with, will they cut the waste, or will they simply reduce spending proportionally across the board (thus damaging funding for necessary services). The roads and bridges in Massachusetts are already in horrible disrepair.

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@Robert Gentel,

I'm waiting for my bailout.

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@Robert Gentel,

Can't states issue their own bonds?

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@McTag,

Gordon Brown seems to have done a remarkable job over here, showing leadership and judgement in this crisis, and European and American financial institutions are following suit. We may have turned the corner.

Is this his finest hour?

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@McTag,

Go Broon!

http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2008/10/15/belltoon512.jpg

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The States Need Help

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