I’ve just finished a big bit of research on the ramifications for the current economic downturn on services AFT members provide. Stunning fact: at the end of the “recovery,” we managed to give 300,000 fewer kids health insurance than at the start.  The recovery hasn’t been good for working people, and it hasn’t allowed state finances to get ahead of where they were in 2001.  The best one-shot look at the perhaps now departed "recovery" comes from the invaluable Center on Budget and Policy Priorities. (See here for the slideshow this comes from.)

The net result is that most of us aren't in as good shape to weather a recession as we'd like. It also looks to me like, between the Fed itself, Fannie Mae, Freddie Mac and this, that the bailout of the financial markets is already somewhere past the value of the bailout of the S&Ls in the first Bush era. I’m unclear on how the strings attached to the Fed’s loans differ from the S&L case and just how bad the securities they are buying up are, but it gives a sense of the magnitude of the problem. Especially if we’re not done.

So we've got a recovery that was not deep or widely shared, coupled with some big storm clouds. How will it affect the states? As a share of gdp, their budgets still are a tick behind where they were in 2000 and about 2/10 of one percent of gdp behind where they were in 2001. And many states'  accumulated reserves are less than 4 percent.

The overall picture is distorted by the subset of states that benefit from $10 a bushel wheat and $100 a barrel oil. But every revenue estimate I'm seeing outside of North Dakota, Alaska and Texas is down. According to CBPP there are 28 states with projected deficits averaging 9 percent for 2009. California leads the way with a 15 percent projected deficit. NCSL will soon publish their semiannual look at budgets, and I'm waiting with growing concern.