The “Constitutional” conservatives vision of America is about to unfold. Think they'll find a way to blame the Democrats?
AP: Deep spending cuts by state and local governments pose a growing threat to an economy that is already grappling with high unemployment, depressed home prices and the surging cost of oil.
Lawmakers at state capitols and city halls are slashing jobs and programs … the cuts are coming at a price — weaker growth at the national level.
The clearest sign to date was a report Friday on U.S. gross domestic product for the final three months of 2010. The government lowered its growth estimate, pointing to larger-than-expected cuts by state and local governments. The report suggested that worsening state budget problems could hold back the recovery by putting more people out of work and reducing consumer spending.
Across the country, governors and lawmakers are proposing broad cutbacks — lowering fees paid to nursing homes in Florida, reducing health insurance subsidies for lower-income Pennsylvanians, closing prisons in New York state and scaling back programs for elderly and disabled Californians.
"The massive financial problems at the state and local levels have and will continue to restrain growth," said economist Joel Naroff of Naroff Economic Advisors.
Naroff is soft peddling what is really about to happen. The pain will be catastrophically real.