The State Net Capitol Journal's Lou Cannon Reports That States May Need Another Federal Stimulus to Climb Out of the "Great Recession"

Federal stimulus money is making its way to the states, but the State Net Capitol Journal's Lou Cannon reports that a growing number of economists believe a second federal bailout may be necessary for cash-starved states to avoid another round of the "Great Recession."

Sacramento, CA (PRWEB) June 25, 2009 -- Federal stimulus money is making its way to the states, but the State Net Capitol Journal's Lou Cannon reports that a growing number of economists believe a second federal bailout may be necessary for cash-starved states to avoid another round of the "Great Recession."

Cannon, a historian and former senior White House correspondent for The Washington Post who has covered every president since Richard Nixon, points to the little-remembered "Second Depression" caused by President Franklin Roosevelt's sudden re-adherence to balancing the federal budget in 1937. Coming on the heels of four years of New Deal federal spending, FDR's about face prolonged the nation's misery all the way to the outset of World War II. Cannon says similar actions by President Barack Obama could similarly forestall a current economic recovery, particularly while state budgets are in such flux.

"The economic downturn has exposed the long-term vulnerability of states, in many of which the tax structure has not kept pace with population growth and built-in spending formulas," Cannon says, noting that "states will still be struggling for at least two years" after the federal bailout money dries up.

To get the full story, check out the new issue of the State Net Capitol Journal on the State Net Web site at www.statenet.com.

About State Net
State Net (www.statenet.com) has helped organizations track legislative and regulatory developments for more than 30 years. Headquartered in Sacramento, State Net monitors every bill in the 50 states, District of Columbia and Congress as well as all state agency regulations. The company delivers online services, issue-based consultation and analysis that enable the nation's leading organizations to effectively respond to opportunities and risks across the nation.

The State Net Capitol Journal delivers coverage of public policy issues from all 50 states. Featuring analysis of emerging trends, state budgets, governors, legislatures and elections, SNCJ readers gain an intelligent overview of the major political issues and events in state governments.

References: Cannon, Lou. (2009, June 22). "States will face hard choices when the recovery arrives" State Net Capitol Journal. www.statenet.com.

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