With the U.S. economy going into a deep slump, the Federal government has attempted to counteract the pain by increasing spending. But for cities and states, it’s virtually impossible for them to run counter-cyclical fiscal policy. Furthermore, the crisis is draining local coffers due to public health expenditure and the collapse of tax revenue. This has already led to the start of a state and local austerity wave (spending cuts, layoffs, etc.) that could take years to reverse. On this week’s episode, we speak with three people who have been writing about this aspect of the crisis, and how it could be addressed by both the Fed and the U.S. Treasury. We’re joined by Skanda Amarnath of Employ America, Yakov Feygin of the Berggruen Institute, and Alex Williams, a grad student at the Levy Economics Institute of Bard College, to discuss the shape of the problem and the way back to economic health.

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