The Anti-Stimulus

California is planning to increase taxes $14 billion and cut $10 billion of services (California has a $43 billion forecast deficit).

New Jersey is required to balance its budget by the state constitution and faces $3.6 billion of cuts.

Philadelphia has a budget deficit of $1 billion and is talking about cuts. NYC has a forecast deficit of $4.3 billion (2010).

In sum, the US states face a total deficit of $183 billion.

What is the combined anti-stimulus effect of states and cities cutting spending?

Some of the federal money is simply going to states to stop them from making cuts, so it is saving old spending, not creating new spending.

The biggest anti-stimulus is slashed consumer spending (especially on higher end items like houses and cars) and corporate investment, but the cities and states can also have a major impact.