For only the second time in 50 years, state budget cuts will act as a fiscal drag on GDP as noted by Bloomberg in Economy in U.S. Slows as States Lose Federal Stimulus Funds. Spending cuts by state and local governments from New York to California may act as a drag on the economy into 2011, only the second time in more than a half century that such reductions have restricted growth for three consecutive years. States face a cumulative budget gap of $127.4 billion as 46 prepare for the start …

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Economy Slows as States Lose Federal Stimulus Funds; MacroAdvisers says Chances of "Double-Dip" are Essentially Nil