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Friday, July 9, 2010

Economics: Motivating States While Stimulating the Economy

An interesting idea ...

... you (the U.S. government) need to mitigate the pain caused by the state governments that are slashing spending. You need a program modeled on Race to the Top. You will provide federal money now to states that pass responsible long-term budget plans that will reduce spending and pension commitments. That would save public-sector jobs and ease contractionary pressures without throwing the country into a fiscal-debt spiral.

From A Little Economic Realism by David Brooks, July 5, 2010, at The New York Times.

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