From KCEP: Lessons from the Great Recession: Kentucky and Other States Need More Federal Relief

Thanks to Jeff Wiggins for sending us this.

By JASON BAILEY

Kentucky Center for Economic Policy Executive Director

As the nation faces the economic fallout from the COVID-19 pandemic, it is critical that the federal government design a policy response that builds on lessons from the most recent downturn. Congress provided significant relief to states in 2009 that was essential to keeping the Great Recession from turning into a depression. But the aid was not large enough relative to the depth of the downturn, and it ran out before recovery was achieved. That withdrawal of support slowed the economy in part by hindering the ability of states like Kentucky to provide vital public services to families and communities.

While Congress has provided some state relief during the COVID-19 economic crisis, new forecasts show that the severity of the crisis means states and localities will need much more in aid as they face cratering tax revenues and rising public costs.

Read more here.