Question

Homework 12

Even if you have already used The Economist as a source for an article summary, this homework assignment asks you to use this source and submit a review of an article from The Economist as a homework assignment. Same "rules" as for all article summaries apply. Why is this a Homework exercise? Because I think The Economist is probably the most comprehensive, politically neutral publication available, and I want to make sure you are exposed to it.

Answer 1

In spite of a strong economy, states in US are wanting for revenue

The immediate reason for the states' budgetary crisis is simple to identify. The sluggishness in the economy’s performance , along with the rupturing of the stock market bubble, considerably lessened the state governments’ revenue flow although the states’ expenses for Medicaid rose . However, this isn’t the complete explanation. The states' fiscal crisis isn’t only due to the economic slump. Their quaking financial grounds were actually set earlier on— via unsustainable commitments such as retirement benefits for the public personnel, deferred maintenance of infrastructure, excessive borrowing . The states failed in their responsibility to accumulate sufficient reserves in the boom period ( 1990s), & the center provides no general revenue-sharing scheme having a countercyclical nature to aid the states in helping themselves. Moreover, Congress has moved more expenses to the states—especially, via the Medicaid program.