Here's something that's been puzzling me: it has been said that the U.S. state governments are in their worst fiscal crisis since the 1930s. And yet the US is not in the middle of its worst recession since the Depression; the Reagan-Volcker recession of the early 1980s, for example, was much worse in terms of lost GDP and raised unemployment rates. So what accounts for the disproportionate severity of the state-level fiscal crisis relative to the condition of the national economy? Is it that the Federal government offers so much less support for services and income supports that states provide? Or because state tax rates are often tied to federal rates, which have been dramatically cut back for the rich? Some combination of both, and if so, with what relative weights? Or is some other factor involved? And is there some book or article that spells this out clearly? Thanks in advance--
Gil
