State and City Cutbacks Stifle Broader U.S. Economic Recovery
- Cuts in municipal spending similar to period after 2008 crisis
- ‘The devastating consequences will last for years’ mayor says
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State and local governments are exerting the biggest drag on the U.S. economy in more than a decade as they eliminate jobs and cut spending in the wake of the pandemic, underscoring President Joe Biden’s push to extend aid to make up for lost tax revenue.
Such cutbacks have contributed to a slowdown in the economy for three straight quarters, marking the longest taper since the fiscal crisis that persisted from 2009 to 2012, according to preliminary data released by the U.S. Bureau of Economic Analysis Thursday.