Cities and States Cutting Spending.

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NEW YORK (Reuters) - Budget shortfalls pose a direct threat to millions of U.S. jobs, many in the private sector, as state and local governments lay off workers and cut spending on contracts and other business services, a think tank said on Thursday.

State and local governments will have to raise taxes and cut spending in the current and next two fiscal years to cover shortfalls totaling $469 billion, according to an Economic Policy Institute report.
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Local government is the biggest employer of gov. workers and they also are who 10’s of thousands of small businesses depend on for selling their products and services to. Cutting spending is going to hit both the public and private sector employment numbers.

Thus, domestic stocks are at risk while international equities may be jore sound if, and it is a big “if,” the global recovery is real or they aren’t in a “bubble.” If they are to far ahead of real growth with price, then they still may have a major correction ahead.

- JanPaul

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