| "By the beginning of 2010, Schwarzenegger and the lawmakers had closed a $60 billion deficit partly by slashing spending on schools, temporarily raising taxes and borrowing from local governments..." |
This is the next shoe to drop and it is likely to lead us into another recession, perhaps far longer lasting than the first because there will not be the comittment at the Federal level to provide any significant money for the states.
Look at the chart below and see how state and local spending is already acting as a drag on GDP. This is just getting started. It will get much, much, worse without help from Washington.
And the sad part about these cuts is that they will affect people who can least afford to lose these services, like the middle class. Less spending on schools, education, police and fire and many other essential services.
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