Most of the thought I’ve put into the “rolling fiscal cliffs” we’re about to climb and tumble down has been of an investing nature – “how will the markets be affected?”
I’m allowed this line of thinking, it’s literally my job to be concerned with such things on behalf of clients.
Michael Cooper’s got a piece up at the New York Times that focuses more on how many states that depend on Federal spending are bracing for the impact of these deadlines and cuts…
States are increasingly alarmed that they could become collateral damage in Washington’s latest fiscal battle, fearing that the impasse could saddle them with across-the-board spending cuts that threaten to slow their fragile recoveries or thrust them back into recession.
Some states, like Maryland and Virginia, are vulnerable because their economies are heavily dependent on federal workers, federal contracts and military spending, which will face steep reductions if Congress allows the automatic cuts, known as sequestration, to begin next Friday. Others, including Illinois and South Dakota, are at risk because of their reliance on the types of federal grants that are scheduled to be cut. And many states simply fear that a heavy dose of federal austerity could weaken their economies, costing them jobs and much-needed tax revenue.
So as state officials begin to draw up their budgets for next year, some say that the biggest risk they see is not the weak housing market or the troubled European economy but the federal government…