With $350 Billion, States Won’t Hold America Back This Time
To judge the success of this latest round of fiscal aid, watch local government employment.
No drag this time around.
Photographer: Leila Macor/AFP/Getty Images
Credit-rating firms typically take a gradual and measured approach when evaluating the effect of a recent development on a certain company or segment of the economy. So it was eye-catching last week when Moody’s Investors Service sent out a report that declared in no uncertain terms: “The $1.9 trillion American Rescue Plan Act will be a credit positive measure across all municipal finance sectors.”
Within hours, Moody’s formally revised its outlook on U.S. states and local governments to stable from negative, given the legislation’s provision for $350 billion in aid. “It will help stabilize state finances and, coming amid most states’ legislative budget sessions, likely allow them to avoid downstream funding cuts for local governments, colleges and universities, and other programs,” analysts led by Nicholas Samuels wrote.