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The crisis among local governments has been exacerbated by difficulties they are encountering issuing debt in the stricken credit markets. Because of their balanced budget requirements, state and local governments typically act in ways that worsen economic downturns by cutting spending and raising taxes. The federal funds are needed to counteract that, she said.

Stephen Stanley, chief economist at RBS Greenwich Capital, doubts that the stimulus will do much to help the economy.

“It may improve psychology and could even provide a fleeting statistical boost to the economy,” like the $168 billion of tax rebates that helped to produce a brief quarter of growth last spring even though they failed to lift the economy out of recession, he said.

“One-off programs, whether they be spending or tax cuts, will not bring on a sustained recovery,” Mr. Stanley said. “The lags involved with getting the money out the door will be far too long to provide meaningful help when it is most needed - now.”

Mr. Stanley does not expect growth to return for another year, and even when the recovery begins, growth will be tepid. For one thing, employers tend to lay off workers quickly but are slow to rehire.

“In each of the last two business cycles, the economy came out of recession only to expand at a sluggish pace for several years,” he said. In 2001, “it took nearly two years after the recession officially ended before employment began to advance.”