The Un-Stimulus

Because most states have to run a balanced budget, we’re seeing a very large drop in state government spending, which almost matches dollar for dollar what the federal government is increasing its spending by. The net result: little total change at all. While we did have a preliminary uptick of 3.5% in GDP growth last quarter, that’s the preliminary number. Analysts are now expecting it to be revised downward to about 1%. Since federal spending accounted for over 2% of that growth number, one can see how it vanished so quickly.

8 thoughts on “The Un-Stimulus

  1. Diane Stout

    Is there an actual name for this situation besides an “un-stimulus”?

  2. Nikkiah Guerra

    Less state funding means less programs and services for the POOR folks, right? Won’t that also decrease school fundings? Does this mean we are looking into a parallel universe of past livings? THIS SUCKS!!! Right about the time I decide to go into college, the government decides to have a doom parade!

    The very first picture on this page should get your attention…read the little caption at the bottom of it.

  3. deanwebb Post author

    Same with ultra-capitalist states. They put plenty of people on the streets in the name of allowing a few to have a chance at making a fortune.

    Anyway, GDP = C+Ig+Xn+G. G is not just federal government spending. It includes state government spending. As the fed. gov’t. tries to increase G, state governments are forced to reduce it… the result? Indeterminate changes… economic speak for “break even or net loss.”

  4. Calvin Owens

    Why can’t the states buy US Treasury bonds? Or some other form of debt?

  5. chanel wan

    Why can’t the federal government allow the states to buy bonds to help boost the economy while we still have the chance to do so?

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