It's the Anti-Stimulus We Should Be Worried About

The success of the Obama stimulus in creating jobs has been broadly, and furiously, debated—and will continue to be as the election season nears. But Ezra Klein argues today that in the end it's the "anti-stimulus"—the massive constriction of state budgets—that will decide our economic fate. Budget gaps in 46 states have led them to slash jobs and/or raise taxes, overwhelming the effect of the stimulus. "In an effort to do right by the numbers, they're doing wrong by the economy."

In most cases, the constitution doesn't allow state officials to run deficits, Klein acknowledges in the Washington Post. But with a total state shortfall projected to be as high as $610 billion, the $787 billion stimulus can't do much more than keep the economy treading water. What's worse, "the federal stimulus money is going to thin dramatically this year, but the state budget problems could grow. And with unemployment sitting stubbornly at 9.7%, we're not in any shape to let the federal stimulus peter out and leave the state anti-stimulus to drag us down." That's why Klein argues that the government needs to step in with emergency aid for states—twice as much as the $50 billion Obama has asked for for 2011. (More economic stimulus package stories.)