Recovery draws closer in US states, but pain persists

Thursday, 2 December 2010 01:06 - - {{hitsCtrl.values.hits}}

WASHINGTON: The recession that began in 2007 may have stopped pummeling the economies of U.S. states, but a report released on Wednesday shows they will remain bruised and bleeding for at least another year.

“After two of the most challenging years for state budgets, fiscal 2011 will present a slight improvement over fiscal 2010,” the report from the National Governors Association and National Association of State Budget Officers said.

Still, states “forecast considerable fiscal stress,” they added.

Most states began fiscal 2011 on July 1. The housing market collapse, financial crisis and longest and deepest recession since the Great Depression created a unique disaster for most states as tax revenue dried up, demand for social services spiked and credit markets froze.

According to the groups, states had to cut general fund spending in both fiscal 2009 and fiscal 2010. “These back-to-back declines, only the second and third time that state general fund spending has declined in the history of this report, also mark the first time in which states have had consecutive years of lower general fund spending,” they said. The recession officially ended in the summer of 2009, and recent indicators have shown that states’ economies may have stopped their decline. Unemployment rates fell last month in most states, and tax revenue has begun to increase.

Clinton ‘should resign’, WikiLeaks founder says

WASHINGTON: WikiLeaks founder Julian Assange said Tuesday that Secretary of State Hillary Clinton should resign if it is shown US diplomats were ordered to engage in espionage.

Assange, the target of a US criminal investigation following WikiLeaks release of masses of classified US diplomatic cables this week, took aim at Clinton in an interview with Time magazine that was conducted from an undisclosed location over the Skype Internet phone service.