Recent decline in state & local tax revenue was the worst ever

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Matt Yglesias looks at the fact that our economy, far from suffering from an outburst of socialism, is actually suffering from a collapse of state and local government employment is offered by this chart of state and local tax revenue:

As you can see, the bust in state/local tax collection is completely unprecedented in the postwar era. To the best of my knowledge, no states and no municipalities has preparations for anything like this. Consequently, the housing bust wound up creating an entirely secondary shake-up in employment and expenditure patterns at the state and local level. If this could have all been “automatic stabilized” away with access to the federal government’s current cheap, cheap, cheap borrowing costs we’d be in much better shape.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including,,, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.