The consequences of doing nothing would be painful. But they would be far less harmful than the consequences of an unconditioned federal bailout, which would mean massive new fiscal commitments at the federal level.

Unfortunately, leaders in Illinois and elsewhere are now talking quietly about the possibility of a federal bailout. Such speculation undermines state and local efforts to reform pension systems or make other hard choices. Why agonize over unpopular budget cuts or tax increases if the feds will ride to the rescue?

Bailing out state pensions would be astronomically expensive. According to a Pew Foundation estimate this year, the total unfunded liabilities of the 50 states’ pension funds amounted to about $1 trillion in 2008. Another recent study, by Josh Rauh of Northwestern and Robert Novy-Marx of the Chicago Booth School of Business, estimated that the unfunded liability was closer to $3 trillion. Adding the liabilities of municipal pension funds makes the total even larger.

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Working harder than ever these days? Get used to it.

The state’s chief economic forecaster John Rainey said Thursday that South Carolinians who have jobs are working harder than ever before and that record high productivity combined with new technological advances will keep unemployment higher for longer.

In other words, if companies can get by getting more out of less — they will.

“I think high unemployment, unfortunately, is here to stay,” Rainey said after analyzing state unemployment data and revenue collections at the Board of Economic Advisors meeting.

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“It’s a nice job if you can get it” ought to be the official motto of the Pennsylvania General Assembly. Although the gravy train has slowed down since 2005 when public revulsion greeted lawmakers who had given themselves a big pay raise in a late-night vote, the freebies have not dried up.

That is depressingly clear from filings with the state Ethics Commission. As reported by the Post-Gazette’s Tracie Mauriello on Sunday, 38 of the state’s 253 legislators shared in at least $67,000 worth of goodies last year.

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On days when faith and school collide, Sana Khan of Raleigh has learned to compromise.

Though the UNC-Chapel Hill senior would prefer no distractions on Eid al-Fitr, a Muslim holy day marking the end of Ramadan, a lecture or exam may beckon.

“You have to weigh the pros and cons of missing class,” said Khan, president of the campus Muslim Students Association. “We’ll go to prayer in the morning and back to class in the afternoon.”

A new state law may ease Khan’s predicament.

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Across-the-board cuts in state spending are all but certain this year despite $540 million in federal aid approved by Congress earlier this week.

Gov. Chris Gregoire said Thursday that tax collections in June and July were about $125 million below projections.

And she expects the state revenue forecast next month will predict more declines ahead.

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Thousands of Catholic Church employees in Wisconsin are now eligible for birth control coverage through their health insurance plans, under the budget bill passed by the Legislature last year.

But because the church considers artificial contraception “gravely immoral,” at least some of those workers – including non-Catholics – could face sanctions, even termination, if they use it, one church official said Wednesday.

“Our employees know what church teaching is. And we trust them to use their conscience and do the right thing,” said Brent King, spokesman for the Madison Diocese, which began covering prescription contraception Aug. 1.

Reproductive health advocates, including the Washington-based Catholics for Choice, criticized the stand, calling birth control “basic health care.”

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When South Carolina lawmakers slashed funding for public colleges and universities, tuition soared.

But tuition did the same thing during better times, when lawmakers raised higher education funding.

While lawmakers and college officials point the finger of blame at each other, annual tuition increases over the past decade have nearly tripled the cost of a four-year degree from a South Carolina public university.

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Plenty of businesses and governments furloughed workers this year, but Hawaii went further ”” it furloughed its schoolchildren. Public schools across the state closed on 17 Fridays during the past school year to save money, giving students the shortest academic year in the nation and sending working parents scrambling to find care for them.

Many transit systems have cut service to make ends meet, but Clayton County, Ga., a suburb of Atlanta, decided to cut all the way, and shut down its entire public bus system. Its last buses ran on March 31, stranding 8,400 daily riders.

Even public safety has not been immune to the budget ax. In Colorado Springs, the downturn will be remembered, quite literally, as a dark age: the city switched off a third of its 24,512 streetlights to save money on electricity, while trimming its police force and auctioning off its police helicopters.

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There’s a class war coming to the world of government pensions.

The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

The have-nots are taxpayers who don’t have generous pensions. Their 401(k)s or individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks.

At stake is at least $1 trillion. That’s trillion, with a “t,” as in titanic and terrifying.

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Saying that it unfairly targets gay men and women, a federal judge in San Francisco struck down California’s voter-approved ban on same-sex marriage on Wednesday, handing supporters of such unions a temporary victory in a legal battle that seems all but certain to be settled by the Supreme Court.

Wednesday’s decision is just the latest chapter of what is expected to be a long legal battle over the ban ”“ Proposition 8, which was passed in 2008 with 52 percent of the vote.

Vaughn R. Walker, the chief judge of the Federal District Court in San Francisco, who heard the case without a jury, immediately stayed his decision pending appeals by proponents of Proposition 8, who confidently predicted that higher courts would be less accommodating than Judge Walker. But on Wednesday, at least, the winds seemed to be at the back of those who feel that marriage is not, as the voters of California and many other states feel, solely the province of a man and a woman.

“Proposition 8 cannot survive any level of scrutiny under the Equal Protection Clause,” wrote Mr. Walker. “Excluding same-sex couples from marriage is simply not rationally related to a legitimate state interest.”

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You may find it here (138 page pdf).

While the support to economic activity from stimulative fiscal policies and firms’ restocking of their inventories will diminish over time, rising demand from households and businesses should help sustain growth. In particular, in the household sector, growth in real consumer spending seems likely to pick up in coming quarters from its recent modest pace, supported by gains in income and improving credit conditions. In the business sector, investment in equipment and software has been increasing rapidly, in part as a result of the deferral of capital outlays during the downturn and the need of many businesses to replace aging equipment. At the same time, rising U.S. exports, reflecting the expansion of the global economy and the recovery of world trade, have helped foster growth in the U.S. manufacturing sector.

To be sure, notable restraints on the recovery persist. The housing market has remained weak, with the overhang of vacant or foreclosed houses weighing on home prices and new construction. Similarly, poor economic fundamentals and tight credit are holding back investment in nonresidential structures, such as office buildings, hotels, and shopping malls.

Importantly, the slow recovery in the labor market and the attendant uncertainty about job prospects are weighing on household confidence and spending….

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In between the statistical data, the dour outlook for state budgets, and the declaration that the longest recession since World War II is at least technically over, Federal Reserve Chairman Ben Bernanke talked Monday of how the South has come a long way in educating its residents and transforming its economy.

Bernanke could speak with a degree of authority on the topic, having attended public schools in tiny Dillon, where he also worked for three summers at the famous South of the Border tourist attraction.

“When I attended public schools in South Carolina in the 1960s, measures of per-pupil spending, years of schooling, and student achievement in the South lagged significantly behind other parts of the country,” the Fed chief said in a speech at the Southern Legislative Conference in Charleston. “Since then, those indicators have changed, very much for the better.”

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The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists.

The latest quarterly AP Economy Survey shows economists have turned gloomier in the past three months. They foresee weaker growth and higher unemployment than they did before. As a result, the economists think the Federal Reserve will keep interest rates near zero until at least next spring.

Yet despite their expectation of slower growth, a majority of the 42 economists surveyed believe the recovery remains on track, raising hopes that the economy can avoid falling back into a “double-dip” recession.

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California Governor Arnold Schwarzenegger declared a state of emergency over the state’s finances on Wednesday, raising pressure on lawmakers to negotiate a state budget that is more than a month overdue and will need to close a $19 billion shortfall.

The deficit is 22 percent of the $85 billion general fund budget the governor signed last July for the fiscal year that ended in June, highlighting how the steep drop in California’s revenue due to recession, the housing slump, financial market turmoil and high unemployment have slashed its all-important personal income tax collection.

In the declaration, Schwarzenegger ordered three days off without pay per month beginning in August for tens of thousands of state employees to preserve the state’s cash to pay its debt, and for essential services.

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South Carolina had more than 7,500 licensed gambling locations. This number was much higher than Nevada, and the city of Columbia had more licensed locations than Las Vegas. There were more than 37,000 licensed video poker machines ”” roughly one for every 100 people in the state.

The gambling industry was taking in a reported $3 billion a year.

The money came disproportionately from the poor: In a 1997 survey of video poker players, 48 percent reported making less than $20,000 per year.

The cost far outweighed the gain….

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Oregon government stands at the edge of a financial chasm as precarious as any in its 151-year history, hemmed in by the global recession, questionable spending decisions and a budget-draining combo of skyrocketing expenses and sluggish growth.

Consider this sobering fact: State expenses, including payroll, health and retirement benefits, and debt payments, are slated to rise by nearly $4 billion over the next two years — a 26 percent jump. During the same period, however, revenues to pay those expenses are expected to increase by a little less than $2 billion, or about 14 percent — and that assumes a return to a robust economy.

Oregon simply can’t keep up.

Lacking a substantial tax increase, which appears unlikely, the state won’t have the money to offer the same level of services, pay and benefits to the same number of people.

The state has faced tough times before, but this crisis is a game changer, economists and political leaders agree. Past budgetary tricks, such as borrowing or sweeping money from other state funds, won’t cut it.

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With same-sex marriage legislation defeated in the state Senate, Gov. Chris Christie on record opposing it, and a proposal to put the question to voters going nowhere fast, hundreds of supporters and opponents of gay marriage squared off Tuesday (July 20) to prepare for the next expected front in the battle: the state Supreme Court.

What originally was supposed to be a small rally by the National Organization for Marriage turned into competing protests after Garden State Equality, the state’s largest gay rights organization, brought in a larger crowd to counter it.

National Organization for Marriage president Brian Brown said his group stopped in New Jersey as part of its 19-state bus tour because he was afraid the state would legalize gay marriage by judicial fiat.

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Just as workers in the private sector participate in Social Security in addition to any pension plan at their companies, most states put their workers in the federal program along with providing a state pension.

Maine and a handful of others, however, have long been holdouts, relying solely on their state pension plans. In addition, most states have excluded some workers ”” often teachers, firefighters and police ”” from the national retirement system and its associated costs, 6.2 percent of payroll for the employer and an equal amount for the worker.

Now, Maine legislators have prepared a detailed plan for shifting state employees into Social Security and are considering whether to adopt it. They acknowledge it will not solve their problem in the short term but see long-term advantages.

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South Carolina consumers would pay more for food, water, electricity and prescriptions in exchange for a lower overall sales tax rate under a tax revision proposal given preliminary approval Wednesday.

And the proposed sales tax increases don’t stop at necessities. The state’s Tax Realignment Commission recommends that the state for the first time charge sales taxes on digital purchases from online stores, such as iTunes and Amazon.com, and pay more to buy a car as part of a massive makeover of the way the state collects taxes.

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Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based.

Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses.

The U.S. lost 125,000 jobs last month as the government cut temporary workers conducting the 2010 census and private payrolls rose a less-than-forecast 83,000, according to Labor Department figures issued July 2. The data signal companies are becoming reticent to hire as the economy cools.

“Businesses are looking at what’s going on in Europe and the stock outlook and people are becoming a little more skittish,” Marisa Di Natale, a director at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We may see that for a couple of more months until we start to see some real momentum in some sector of the economy.”

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A new Time poll reveals just how hard the task is: Two-thirds of respondents say they oppose a second government stimulus package. And 53% say the country would have been better off without the first one.

The result is a White House pulled in three directions at once as it tries to repair the economy ”” and ensure that Obama and the Democrats can survive a rising tide of public anger. First, the Obama team is improvising ways to pass piecemeal spending items through a Congress where stimulus has become a toxic word. At the same time, the White House is signaling its concern about that budget deficit that has Tea Partyers raging ”” both through token gestures, like a White House contest that lets the public vote on cost-cutting ideas submitted by federal employees (the winner gets to meet Obama and see his or her idea go in the President’s next budget), and through Obama’s support for the work of a bipartisan deficit commission. And finally, the White House is trying to explain to angry liberals that it’s doing everything possible to keep the economy moving and fight Republican resistance to new spending.

It’s a delicate balancing act, on a par with Obama’s effort to pass health care reform without appearing to get too involved in the details. And just as it did in the health care battle, the future of Obama’s presidency ”” as well as the fate of the American economy ”” may hang on the outcome.

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In 1857, explaining his decision to send the army to put down a “rebellion” in Utah, President James Buchanan complained that Brigham Young’s fanatical followers “obey his commands as if these were direct revelations from heaven.” One hundred and fifty years later, the Church of Jesus Christ of Latter-day Saints again stands accused of fanaticism, in this instance by a documentary that seeks to indict the church for its recent foray into the politics of marriage.

“8: The Mormon Proposition” chronicles the role the church played in enshrining a constitutional ban on same-sex marriage in California by supporting the 2008 passage of Proposition 8. As a spotlight on the suffering of same-sex couples and individuals who are rejected by family and church leaders, the film succeeds. Its critique of the church’s recent political activism, however, is as ham-fisted as many of the mid-19th century allegations against the church.

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That’s why the best booster shot for this recovery and the next would be to allow states to borrow from the Treasury during recessions. We did this for Wall Street and Detroit, fending off disaster. It’s even more important for states.

Here’s how this would work. States already receive regular federal matching grants to help pay for Medicaid, welfare, highway construction programs and more. For instance, the federal government pays a share of state Medicaid costs, from 50 percent to more than 75 percent, depending on a state’s wealth. The matching rates were temporarily sweetened by last year’s stimulus.

But Congress should pass legislation that would allow a state to simply get an “advance” on these future federal dollars expected from entitlement programs. The advance could then be used for regional stimulus, to continue state services and to hasten our recovery.

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Received this morning:

“I cant believe my 10 yr old grand daughter got a $153 ticket yd for walking her dog, great way to find out state has a law requires a person to be 18 to walk a dog without adult supervision.”

Investors are worried that the risk of default for US local governments is growing, amid signs that some regions are facing the same type of difficulty in curbing pension and budget deficits as some eurozone countries.

The yield attached to some forms of infrastructure municipal bonds has risen relative to US Treasury bonds because of fears that cash-strapped local governments will struggle to repay these loans.

Absolute borrowing costs for regional governments remain relatively low in historical terms because of the Federal Reserve’s ultra-loose monetary policy. But any swings in municipal yields will be watched closely by investors, since they suggest that the fiscal anxieties about the eurozone could now infect the US.

“The risk in the second half of the year is that investor attention switches from Europe to the US,” said Robert Parker, senior adviser at Credit Suisse Securities, who singled out parts of California, as well as towns and cities in Illinois, Michigan and New York state as among the most vulnerable.

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Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo.

He picks the papers off his desk and points to a figure in red: $5.01 billion.

“This is what the state owes right now to schools, rehabilitation centers, child care, the state university ”” and it’s getting worse every single day,” he says in his downtown office.

Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

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Far from rebounding, the Golden State, with a $1.8 trillion economy that’s larger than Russia’s, is sinking deeper into its financial funk. And it’s not alone.

Even as the U.S. appears to be on the mend — gross domestic product has climbed three straight quarters — finances in Arizona, Illinois, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution. State spending is 12 percent of U.S. GDP.

“States are going to have to cut back spending and raise taxes the same way Greece and Spain are,” says Dean Baker, co- director of the Center for Economic and Policy Research in Washington. “That runs counter to stimulating the economy and will put a big damper on the recovery in the latter half of this year.”

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Republican voters in South Carolina made political history on Tuesday with two nominations that broke with longstanding racial, cultural and gender trends.

Tim Scott was chosen overwhelmingly as the party’s candidate in the 1st District congressional race, and Nikki Haley became the party’s first female nominee for governor. Each is considered the favorite for November’s general election.

If Mr. Scott wins, he would be the first black Republican in the House of Representatives since Oklahoma’s J.C. Watts retired in 2003. The last black Republican representative from South Carolina was Robert Smalls of Beaufort, who left office in the 1880s.

Mrs. Haley would be the state’s first female governor and the country’s second Indian-American governor. A staunch conservative, state Rep. Haley beat Gresham Barrett handily. But on the road to winning, her gender and her ethnicity were issues.

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Nikki Haley trounced Gresham Barrett on Tuesday to win the GOP’s nomination for governor, breaking gender and ethnic boundaries, and sending a message to the Republican establishment: Conservatives are tired of entrenched politicians and they’re sick of the status quo.

Haley, a 38-year-old married mother of two who overcame unsubstantiated accusations of adultery, is the daughter of immigrant parents from India and the first woman in South Carolina’s history to win the nomination for governor from one of the two major parties.

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