12. Prospects for Budget Stabilization by Subnational Governments

This chapter concludes the book as a nonconclusion. It first briefly ­summarizes the key points of the whole book, then reviews the performance of countercyclical savings in the Great Recession, thereby touches upon a few issues indirectly related to budget stabilization at the subnational level that this book has not discussed. Finally the chapter offers the caveat that boom-year savings are one of the devices for financial management and budget stabilization in recession years. Savings per se are not enough; whether savings can accumulate in boom years and whether they can be used most efficiently and effectively in bust years is part of fiscal discipline which is the bottom line that we should hold at any time.