State and Local Budget Woes Create Drag on Recovery

Wall Street Journal: “The hit to U.S. state and local finances from the coronavirus pandemic could be a drag on the nation’s economic recovery for years to come, if the past is any guide.”

“State and local government spending and employment levels didn’t fully recover from the 2007-09 recession until last fall, a decade after the downturn ended and only a few months before the coronavirus led to a new round of cuts…”

“The condition of state and local government finances affects the health of the broader economy because their spending amounts to almost 11% of gross domestic product, and they employ about one of every eight American workers, including teachers, police officers and firefighters.”