US states could weather a mild recession
Thursday, August 29, 2019
Significance
If there is a recession, it will affect both the country at large and its constituent 50 states. US states are not permitted to run budget deficits, and this makes them vulnerable to economic downturns. Some commentators see a recession within two years and if so, the next fiscal year (October-September) could possibly be the last year of the current economic growth period.
Impacts
- Legalisation of marijuana will be viewed by some states as a path to new revenues and spending.
- Some states will seek more revenue from sports betting and casinos, but both markets could constrain each other.
- Medicaid spending is growing, and it will consume a larger share of states’ budgets.
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