State stimulus funds help to reverse GDP downward trend

Tax collections for states are down 8 percent but, thanks to the stimulus package, most of the lost revenue has been replaced by federal stimulus money. In fact, these stimulus funds have helped to reverse six months of spending declines by the states, according to a report from the Bureau of Economic Analysis.

State and local government expenditures were up 4.8 percent. That helped to minimize the decline in the GDP to just 1 percent in the past quarter. A huge improvement over the 6.4 percent drop in the first quarter.