Robert Kuttner argues that a second stimulus could help states avoid layoffs, program cuts, and tax hikes: Economic growth declined by only 1 percent from April through June, compared to 6.4 percent in the first quarter -- in these times that passes for good news. Without the Obama stimulus of $787 billion, the damage would be far worse. But there are two areas of the economy where still-deteriorating conditions require more federal intervention. One is unemployment -- 9.5 percent and heading for double digits. The other is the condition of state and local government. Most state constitutions require balanced budgets. So in a recession, when revenues fall, states are compelled to behave perversely. They cut program outlays just when public needs increase. They lay off workers, defer projects, raise taxes, and resort to budget gimmicks that are bad policy in their own right. KEEP READING ...
