Don’t Look Down! Estimating the Depth of State Covid Budget Holes

Having an exciting night with the power cutting in and out due to Zeta isn’t conducive to concentrating. And was not conducive to searching either, since we eventually lost our Internet connection. So apologies for this post being thin. Nevertheless, let us turn to another solid Wall Street Journal article on Covid’s considerable damage to the economy.

Yesterday, we discussed a critically important issue that both Presidential candidates are pointedly ignoring: that once Trump eviction moratorium expires in January, unless Something Is Done, 30 to 40 million people are set to be thrown out of their dwellings. Some may be able to crash with relatives or live on friend’s couches, but a significant percentage will wind up homeless, a visible explosion in distress that the US will not have suffered since the Great Depression.

Today, the Journal probes another looming disaster stemming from the reluctance of either party to step up and spend enough, in this case, to salvage state and municipal budgets. Finger-pointing at the Republicans for their refusal, in the recent failed rescue talks, to include funding for state and local governments doesn’t properly apportion blame. A stimulus package, even if it denied additional funding to these bodies, would have still given them some help by boosting the incomes of citizens and businesses. That would have meant higher sales and income tax revenues than in the “no stimulus till at best March” mess we are in now.

Remember that state and local governments have already cut headcounts. That’s only going to continue as the budget black holes

Keep reading this article on Naked Capitalism (Yves Smith) - Blog.

Leave a Reply