Do We Need Another Stimulus Bill?, Ctd

by Patrick Appel

A reader writes:

As the Federal government is busy trying to stimulate the economy, many state governments are actively de-stimulating the economy.  California's been getting most of the press on this front recently because of its sheer size and, um, special politics.  But a large majority of states are slashing both their employment levels and their social safety nets, two avenues for spending that have a strong direct impact on consumer spending levels.  So states have the ultimate shovel-ready program - not firing people.  It's instantaneous.  If one accepts the argument that a second stimulus is good in principle, the practice would be to give the money to state governments to support existing programs.  They would have no trouble spending it, and quickly.