While much of the economic attention has been at the federal level, the states are not all suffering equally.  California has been grabbing the healines, but it is not the only state suffering.

This graph shows the current unemployment by state (red segments) and the high and low unemployment rates since 1976 (blue bars).  This shows that a number of states are poised to have their unemployment rate exceed the highs of the early eighties.


Mary Daly of the Federal Reserve Bank of San Francisco provides the following map of State budget gaps (i.e., how much their revenues are below their budget).  States like California are likely to lead the way in cost cutting and revenue raising measures.  Expect increased municipal bond volatility in the distressed states as their administration and legislative bodies wrestle with closing the budget gap.

There has been some talk of federal aid to the states, but with the current level of partisan politics, I see this as unlikely.

Source: FedViews, by Mary Daly, FRBSF [Charts]