9:15 AM
New government figures show that state and local governments boosted spending 7.8% in the second quarter compared with 2007 while revenue rose 2.5%. Government is on a hiring binge, too, even as private-sector jobs disappear. The Bureau of Economic Analysis reported that government can provide more services, but that could bring higher taxes.
Chris Edwards, budget director of the libertarian Cato Institute, says elected officials don't manage money well. "Why can't government adjust a percentage or two here and there without having a crisis?" he asks. "Businesses do it routinely."