Writes Ryan W. McMaken

The states (and the local governments) are facing crushing deficits and declines in tax revenues. Unlike the feds, the states can’t simply monetize debt by having the Fed purchase enormous amounts of new debt.

But that doesn’t mean the states can’t ask Congress to run up some new debt for them. The states are now begging the feds for free money in the form of Medicaid “stimulus” funds in the hope of closing huge budget gaps. But fortunately, Congress presently lives in fear of the November elections. States will need to come up with new strategies.

During The Great Depression, they turned to legalizing and taxing booze. They’d be wise to think similarly this time around.

Michael Boldin

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