The Pew Center has this very sober research report on State Tax Receipts.
http://www.pewcenteronthestates.org/report_detail.aspx?id=56044
http://downloads.pewcenteronthestates.org/Beyond_California_Appendix.pdf
Nine states are in distress and only two have balanced budgets. So what ever stimulus the Federal Government is giving, the states are taking away.
The thinking here is that Retail Sales is not a good barometer for the state of the general economy. If we are in a general economic recovery, then where are the state sales taxe receipts? So if sales taxes are down, how come we keep hearing retail sales are up while employment ticks down? Well the reason is most of the headline economic reports are from surveys taken via big and mid sized retailers. It doesn't survey small business's that are in deep distress. Also chain stores will generally close under performing stores so existing stores get better results. Also of note, competition is less as more and more weaker stores (Circuit City)go out of business.
No matter what stimulus is provided, its not filtering down to every day citizens.
Filter in 10.2% unemployment and the non self sustaining housing recovery, and we have the ingredients to a double dip recession. But this time it will feel like a severe depression. The only way I think we can get back to even 7% unemployment rate within 5 years is a world where we have no recessions, where we actually add a couple million jobs.
Has the world ever worked like this before?
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