America's children hurt most by housing recession

Middle class families have traditionally depended on their homes as their store of wealth. Local municipalities, in turn, have traditionally derived their revenues from property taxes. This recession has been different from past recessions in that families and communities have been more directly and immediately affected, due to the dramatic fall in housing prices.

Most states and municipalities are forbidden by law from borrowing money to cover a period of revenue shortfall. While police and fire departments have suffered cutbacks in their budgets, the service most severely hit by revenue loss has been education. Substantial numbers of teachers have been laid off, programs cut, and recreational and educational activities curtailed, especially in sports and the arts.

Ordinarily, the federal government would intervene to assist the states, which in turn would assist local communities in maintaining their educational infrastructure. No longer. Yes, Congress did pass the stimulus package which provided $140 billion dollars to support state and local governments over two and a half years. But that money covered less than 40 percent of state revenue losses in 2009 through 2011, and it has run out. Read more......