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Support of State and Local Finance under Persistent Federal Deficits

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  • Jason Seligman

Abstract

The United States’ federal government subsidizes local public finance through grants. Given projected U.S. deficits, this may prove untenable. Further, a broader range of policy instruments may offer more effective support of local governments. Herein four policies are considered beginning with current policy: federal deficit financed grants, federal placement, federal underwriting, and Federal Reserve System interventions. Options are evaluated in a general framework considering citizen and government objective functions. Policy recommendations are for interventions to specify terms of entry and exit (as with automatic stabilizers), and for initiation of contingency-simulation exercises to determine the potential of options identified herein. Copyright International Atlantic Economic Society 2012

Suggested Citation

  • Jason Seligman, 2012. "Support of State and Local Finance under Persistent Federal Deficits," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(4), pages 383-395, November.
    • Handle: RePEc:kap:iaecre:v:18:y:2012:i:4:p:383-395:10.1007/s11294-012-9369-9
    DOI: 10.1007/s11294-012-9369-9
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    References listed on IDEAS

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    6. Bradford D. Jordan & Susan D. Jordan & David R. Kuipers, 1998. "The mispricing of callable U.S. treasury bonds: A closer look," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 18(1), pages 35-51, February.
    7. N. Apergis & E. Mamatzakis & C. Staikuras, 2011. "The Greek Sovereign Debt Crisis: Testing for Regime Changes," Working Paper series 16_11, Rimini Centre for Economic Analysis.
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    Cited by:

    1. Klaas Staal, 2020. "State-level Federal Stimulus Funds and Economic Growth: The American Recovery and Reinvestment Act," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(1), pages 33-43, February.
    2. Barbara Klein & Klaas Staal, 2017. "Was the American Recovery and Reinvestment Act an Economic Stimulus?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(4), pages 395-404, November.

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    More about this item

    Keywords

    Fiscal Federalism; Public Finance; Taxes; Municipal Finance; Fiscal Policy; Monetary Policy; H50; E50; E62;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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