Fiscal Aftershocks

Source: Larry Anderson, GovPro, December 1, 2009

The economy is looking up, but governments will be feeling the recession’s effects throughout 2010.

Economic growth of 3.5 percent in the third quarter of 2009 may mark the end of the Great Recession, but state and local governments will likely feel ongoing negative effects throughout 2010 and beyond. Unemployment rates near double digits will continue through the next year, and governments will continue to endure the collateral effects of weak tax revenues, lower property values, slower consumer spending and other negative economic factors. But for the infusion of federal stimulus money, it would be a lot worse.

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