Depressed Local Government Spending Hurts US Economy

US cities and states are cutting spending on police stations, highways and other crucial infrastructure, and it’s pushing down US economic growth.

State and local governments spent an annualized $248.47B in August on construction, nearly 11% less than the recent peak in 2015 and the least since March 2014, the Wall Street Journal reports. This decline is depressing GDP growth as states cut back on infrastructure expansions and simply maintain what they have.

States are also cutting investments in higher education, which S&P Global Ratings managing director Gabe Petek says does not bode well for long-term economic growth. [WSJ]

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