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State and Local Government Finance in the Current Crisis: Time for Emergency Federal Relief?

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  • David Wildasin

    (Martin School of Public Policy and Administration and Department of Economics, University of Kentucky)

Abstract

A review of recent fiscal history can help to understand the mechanisms by which subnational governments adapt their tax, expenditure, and debt policies to an ever-changing economic environment, and on the role of fiscal assistance from higher-level governments in this process. In principle, proposed Federal assistance to states and localities may provide useful macroeconomic stimulus and financial support, but past experience, in the US and elsewhere, highlights the pitfalls in achieving rapid delivery of substantial assistance while simultaneously targeting scarce fiscal resources to the most urgent needs and preserving incentives for prudent financial management by states and localities.

Suggested Citation

  • David Wildasin, 2009. "State and Local Government Finance in the Current Crisis: Time for Emergency Federal Relief?," Working Papers 2009-07, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    • Handle: RePEc:ifr:wpaper:2009-07
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    File URL: http://www.ifigr.org/publication/ifir_working_papers/IFIR-WP-2009-07.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • G01 - Financial Economics - - General - - - Financial Crises

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