The state of the states is dismal. As the FT reports on Tuesday, many states’ hard-fought battles to balance their budgets were not over with the fiscal year-end in June. Worsening revenue numbers are making the 50 Capitols into recession-aggravating machines.

On average, the first quarter of 2009 brought states almost 12 per cent less in tax revenues than the same period in 2008. Managing this shortfall through spending cuts will be painful: state government expenditures make up 10 per cent of the US economy. Deficit spending cannot fill the gap, as most states are prohibited from borrowing to fund current spending.