publication . Article . 2009

Should the federal government bail out the states? Lessons from past recessions

Richard H. Mattoon;
Open Access
  • Published: 01 Jan 2009
Like the economy in general, individual state economies are struggling in this recession. State governments face significant constraints in raising additional revenues. Most states are required to balance their budgets regardless of the economic environment. This article considers the role of the federal government in helping the states to manage their finances.
free text keywords: Federal government ; State finance

9 The American Recovery and Reinvestment Act of 2009 was enacted by Congress and signed into law by President Obama on February 17, 2009.

10U.S. General Accounting Office, 1977, “Antirecession assistance: An evaluation,” report, No. PAD-78-20, Washington, DC, November 29, pp. 6-7, available at

11U.S. General Accounting Office (2004), p. 2.

14Congressional Budget Office (1978), p. 25.

15Max B. Sawicky, 2003, “Altered states: How the federal government can ease the states' fiscal crisis,” EPI Issue Brief, No. 187, February 26, available at publications/entry/issuebriefs_ib187/.

16U.S. General Accounting Office (2004), pp. 8-9.

17Ibid., p. 13.

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