Abstract:
The Great Recession has created fiscal crises for state and local governments. In response, state and local governments are cutting taxes, slashing wages and benefits for public workers, or even selling off state-owned facilities. In this article,  in New Labor Forum, Robert Pollin and Jeffrey Thompson argue that these austerity policies are not the only possible responses to the crises, and propose alternative approaches that can close the budget gaps in the short term, promote a sustainable recovery, and, over the long term, help insulate state and local government budgets from the effects of recessions.