Commentary

Second Stimulus?

At Stateline.org, David Harrison explores the current thinking on a so-called “second stimulus” to prop up state budgets when the “first stimulus” dries up in 2011:

Edward DeSeve, President Obama’s special adviser on the recovery, declined to offer specifics on how Washington would help statehouses after the stimulus ends, including whether there would be another fiscal aid package for states. But he suggested that the fiscal relationship between the states and the federal government could change after the worst downturn since the Great Depression.

“At some point during the next two years, Congress is going to be faced with the need to rationalize the relationship between these spending accounts that theyââ?¬â?¢ve given the states and the money they’ve appropriated to the states during this period and the great needs that the states have in their economies,” he said at a State Economic and Fiscal Forum for reporters co-sponsored by Capitolbeat and the Pew Center on the States, of which Stateline.org is a part. “Do we have the right fiscal balance between the states and the federal government?”

One comment: could that be more ambiguous?

One question: are we supposed to have a “fiscal balance” between the states and federal government?

For more on the “second stimulus” topic, see Reason Foundation’s Economics, Bailouts and Stimulus archive.

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.