State Budgets
Budget shortfalls, city defaults & bankruptcies, potential state bankruptcies means the budgets of individual states will impact the economies of the other states and the federal budget/deficit.

Bail Out the States?

from The Wall Street Journal,

Any more federal aid should come with very strict conditions.

Congress is passing its fourth coronavirus relief bill this week, and already Democrats are teeing up the fifth. The main goal this time will be to bail out state governments, especially those run by Democrats and their allies in public unions. The question to ask is why taxpayers in Appleton and Sarasota should rescue politicians and unions in Albany and Springfield? “You know the state governments are broke, to use a very blunt term. You know the state governments are now responsible for the reopening and the governors are going to do the reopening, and they have no funds to do it,” New York Gov. Andrew Cuomo said Tuesday after making his case to President Trump for more federal cash. *** The Governor blames the pandemic and recession, but states like New York were already in trouble from their own mismanagement. Mr. Cuomo warned for months about a $6 billion state deficit thanks to runaway Medicaid costs and taxpayers leaving his high-tax state. He signed a $177 billion business-as-usual budget on April 3 that allows him to borrow $11 billion if spending exceeds revenues. The coronavirus was already a clear and present danger.

Senate Majority Leader Mitch McConnell said Wednesday that he supports the idea of allowing states to use bankruptcy protection to cut their debts instead of supporting them with more federal aid.

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