Happy new year
Source: www.economist.com
Jul 2nd 2009 (Adapted)

    The mantra in Washington, DC is simple: spend billions now, pay later. Congress has been crafting ambitious plans for energy, health care and transport. But the mood in state capitals has been different. Forty-six states had a deadline of June 0th to pass their budgets. Just as important, those budgets had to be balanced. With the sole exemption of Vermont, America´s state governments, unlike the federal one, are not allowed to run deficits. June was an agonizing
month.
    On the morning of July 1st, the first day of the new fiscal year for most states, taxpayers had reason to be glum. Connecticut, North Carolina and Ohio had passed temporary extensions. California, Arizona, Pennsylvania and Illinois did not have a balanced budget as required.Most states that did pass budgets imposed painful cuts, higher taxes and fees on everything from pesticides in Minnesota to hunting licences in Maine.
    Matters would be worse if it were not for Washington´s stimulus package, which provides more than $135 billion to support state budgets. Most money, $87 billion, is for Medicaid, the government´s health-care programme for the poor. A further $48 billion created a State Fiscal Stabilisation Fund, mostly for schools and universities.