The Biggest Job Killer in 2011? Cities and States

Source: Derek Thompson, Atlantic, December 5, 2010

No state has defaulted on its loans since the Great Depression. But the New York Times warns that states and municipalities could be closer to that rare and grim fate than ever before. Federal stimulus cash is drying up in 2011, just as states face what might be their most crushing budget shortfalls, as weak tax revenue fails to provide for large spending demands. If they cannot close the gap with spending cuts and tax increases, they may be forced to revisit their promises to bond holders.

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