One drag on growth, however, was government. Steep budget cuts by municipalities around the country led spending by state and local governments to fall at a 1.3 percent annual rate. State and local governments have subtracted from overall economic activity in 10 of the past 12 quarters.That's interesting, since the Republicans have been telling us that cutting back government spending, at both the state/local and federal levels, is just what the doctor ordered. It seems they were referring to Dr. Kevorkian.
Oh, and why is it that state and local governments are being forced to cut back? Why, in part because the stimulus is running out. Yes, the stimulus not only helped state and local governments, it helped the over economy grow. Fancy that.
The expiration of federal stimulus funding for Medicaid has dealt a blow to states still struggling to recover from the economic downturn, according to figures released Thursday.A number of GOP governors even turned down federal stimulus monies for things ranging from transportation to unemployment benefits. And what did it get us? Lower economic growth. Imagine that, the Republicans' prescription for the economy was wrong again.
To compensate for the loss of extra federal Medicaid dollars this June, states have increased their spending on the program by an average of 29 percent in the current fiscal year.
