What Is the Remedy for State and Local Fiscal Squeeze During the COVID-19 Recession? More Debt, and That Is Okay

• Autores: James W. Douglas, Ringa Raudla
• Localización: The American review of public administration, ISSN 0275-0740, Vol. 50, Nº. 6-7, 2020 (Ejemplar dedicado a: Special issue: Double Issue Dedicated to COVID-19), págs. 584-589
• Idioma: inglés
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• Resumen

  • The COVID-19 crisis is placing a tremendous fiscal squeeze on state and local governments in the United States. We argue that the federal government should increase its deficit to fill in the fiscal gap. In the absence of sufficient federal assistance, we recommend that states suspend their balanced budget rules and norms and run deficits in their operating budgets to maintain services and meet additional obligations due to the pandemic. A comparison with Eurozone countries shows that states have more than enough debt capacity to run short-term deficits to respond to the crisis.