Henninger's quote below certainly applies to Vermont. We are a state where the public sector is intentionally squeezing the private sector as it has increased government services and commensurate spending. Vermont's economy was unhealthy even before the recession began. Nevertheless, Vermont racheted up spending beyond the ability of the tax base to support it.
State government is now facing runaway pension and retiree health care liabilities and a massive (by Vermont standards) hole in its future revenue stream. The basic problem: Vermont for a decade or more has been on a "Cadillac" state spending binge fueled by a "clunker" private sector economy.
"The problem is that in Washington and many states the public sector’s revenue needs have arrived at a point where space for the private economy is more or less beside the point. That is the clear message of the California and New York budget crises and the difficulties of financing the Obama health-care plan.My guess is that leaders in Montpelier are hoping that national health care reform will bail them out of the fiscal pit of Medicaid and Catamount Health. Yet none of this relief would kick in, as I understand it, until 2013 at the earliest if approved.
For centrists in both parties the moment has come to decide which side of the public-private divide they want the U.S. and its future workers to be on. Trying to live in both has brought us, inevitably, to that decision."