Don't dismiss California's $26.3 billion budget shortfall as evidence of that state's wacky ways.
A similar crisis may be coming to a state or a town near you, says Stephen Levy, senior economist Center for Continuing Study of the California Economy, a private research firm.
Levy says California - and other states - deserve more help from Uncle Sam, but don't call it a bailout. "It's not our fault. It's the recession's fault," he says.
Without additional Federal stimulus, "there’s going to be carnage everywhere and the Federal government has the only pot of dollars to really stem this crisis," Levy says.
But where's the money going to come from? It's not like the Federal government is fiscally fit these days.
Here’s what Levy suggests:
•Congress should release the rest of the $150 billion earmarked in the stimulus plan for state and local projects, sooner than later. As of now only about $30 billion has been disbursed.
•Give the roughly $70 billion of TARP funds the banks have repaid to local governments.
Left to their own devices, Levy expects more financial problems to sprout up across the country, noting Michigan, Ohio, New York, Pennsylvania, Arizona and Florida also face major budget shortfalls.
"Every state and local government is going to be in severe budget crisis for the next two years," he says. That means fewer public services and jobs for everyone; against that harsh reality, inaction by Congress "counteracts the objectives in
stimulus program" to help shore up the social safety net, he says.
http://finance.yahoo.com/tech-ticker/article/276641/Don't-Call-It-a-Bailout-%22Carnage%22-Coming-to-Your-Town-Unless-More-Stimulus-Approved?tickers=TBT,tlt,nqc,%5Egspc,%5Edji,xlf,skf&sec=topStories&pos=8&asset=&ccode=
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