Cash from organized crime ‘rescued’ banks during crisis: UN official

The vast majority of an estimated $352 billion in proceeds of organized crime, mostly from the drug trade, was funneled through the global banking system during the financial crisis of the past two years, and in some cases, the money rescued banks from collapse, says the head of the UN Office on Drugs and Crime.

Antonio Maria Costa told the UK Observer that intelligence agencies and prosecutors alerted him 18 months ago to evidence that drug money was being “absorbed into the financial system.”

“In many instances, the money from drugs was the only liquid investment capital,” Costa said. “In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.”

The Observer reports:

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, [Costa] said.

“Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

Read the complete Observer article here.

Costa has been head of the UN’s drug and crime office since 2002, and is known for his tough stance on illicit drugs, including marijuana. He recently warned that Africa is becoming a major drug hub, following an investigation into the crash of a Boeing 727 in Mali that had flown in from Venezuela carrying 10 tons of cocaine.

ARTICLE FROM The Observer:

Drug money saved banks in global crisis, claims UN advisor

Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations‘ drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime’s influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. “In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor,” he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

“Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

“That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was,” he said.

The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

British bankers would want to see any evidence that Costa has to back his claims. A British Bankers’ Association spokesman said: “We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks.”

Jesse Ventura recently went on Howard Stern’s radio show, and discussed many interesting topics. The two touched on everything from Jesse Ventura’s new television show ‘Conspiracy Theory’, September 11th conspiracies, life as a former governor, and Jesse’s claim that he can prove who really killed J.F.K.

Houston Is Largest City to Elect Openly Gay Mayor Read the full story

Ingram wins Alabama’s 1st Heisman

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UH coach Sumlin declines interview at Cincinnati

http://www.chron.com/disp/story.mpl/sports/college/houston/6766918.html

Kevin Sumlin has eliminated himself from consideration for the vacant University of Cincinnati head football coach job.

In a statement released Saturday afternoon through the University of Houston, Sumlin said he decided against interviewing for the Cincinnati job that opened Thursday when Brian Kelly left for Notre Dame.

Sumlin is 18-8 in two seasons at UH, which faces Air Force in the Armed Forces Bowl on Dec. 31 in Fort Worth.

“After speaking with representatives with the University of Cincinnati yesterday and today, I declined an interview,” Sumlin said. “I am looking forward to our first bowl practice later this afternoon and later honoring our seniors at the football banquet tonight.”

In the release, the school said players will not be available for comment until an undetermined time.

Sumlin says no to Cincy interview

http://sports.espn.go.com/ncf/news/story?id=4737118

Houston coach Kevin Sumlin has declined an interview request for the vacant Cincinnati job.

“After speaking with representatives with the University of Cincinnati yesterday and today, I declined an interview,” he said in a statement. “I am looking forward to our first bowl practice later this afternoon and later honoring our seniors at the football banquet tonight.”

The Bearcats are in the midst of leadership change after former coach Brian Kelly left the program for Notre Dame on Thursday.

Kelly posted a 34-6 record in three years at the school and has guided Cincinnati to consecutive BCS bowl appearances in the past two seasons.

Sumlin, who took the Houston job in 2008, came to the Cougars after a five-year stint as an Oklahoma offensive assistant under Bob Stoops.

The Cougars are 18-8 under Sumlin and will play Air Force in the Bell Helicopter Armed Forces Bowl on Dec. 31.

Houston’s Kevin Sumlin declines interview for University of Cincinnati job

http://news.cincinnati.com/article/20091212/SPT0101/91212007/Houston+coach+not+interested+in+UC

Houston football coach Kevin Sumlin issued a statement through the school Saturday that he has declined an interview for the coaching job at the University of Cincinnati, according to the Houston Chronicle.

“After speaking with representatives with the University of Cincinnati yesterday and today, I declined an interview,” Sumlin said. “I am looking forward to our first bowl practice later this afternoon and later honoring our seniors at the football banquet tonight.”

UC’s Athletic Diretcor Mike Thomas said Thursday he will not comment on his search for Kelly’s replacement until it is complete.

The UC job became open when Brian Kelly left for Notre Dame.

On Wednesday, Houston athletic director Mack Rhoades told the Chronicle he and Sumlin were “probably 99 percent” set on a new deal. Sumlin said the negotiations were “getting close to where we need to be.”

• Possible candidates for UC job

The Enquirer will update this story.

Sumlin Not Interested in Cincinnati Job

http://www.myfoxhouston.com/dpp/sports/091212_someone_not_leaving_uh

Updated: Saturday, 12 Dec 2009, 4:51 PM CST
Published : Saturday, 12 Dec 2009, 1:43 PM CST

MARK BERMAN

Police Accused of Violating Human Rights at COP

Copenhagen Police Accused of Violating Human Rights at UN Summit

Danish police have indiscriminately arrested hundreds of climate justice activists during a climate change protest made up of 100,000 people that took place today in Copenhagen. Questions have been raised about the fact that the arrests occurred in a different time and place to where some trouble had momentarily flared earlier in the day. Journalists have been restricted from reporting at the site of the arrests since 1800hrs.

It’s estimated that 100 people are still being held on the road in extremely cold weather, cuffed and forced into seated positions in lines (1). They have expressed severe physical discomfort and have no access to water, medical attention or toilet facilities since 1530hrs. Many activists are reported to have urinated themselves while detained on the ground.

An estimated 200 have been removed from the site and taken away in coaches. Several people are reported to have fainted around 1945hrs.

Helga Matthiassen, who was detained for an hour before being released due to an injury she had recently sustained, said, “Of course we’re angry – people all over the world are angry about being lied to by governments who are making a corporate deal at the climate talks, and now when we try to protest against this on the streets we are randomly held by police.

“Not only have we been denied the right to protest, but our basic human rights have also been ignored in this ludicrous, staged police exercise. It seems Danish Police have a new motto: why just criminalise protesters, when you can dehumanise them too?” (2)

ENDS

Contact: 0045 5066 9028 (International)
0045 4129 4994 (Danish)
media@climate-justice-action.org

_______________________________________

NOTES TO EDITORS
(1) http://twitpic.com/t7dts
(2) See Helga interviewed on TV2 News, 2015 broadcast http://news.tv2.dk/?channel

Twitpic:

(Source: http://twitpic.com/t7dts )

Copenhagen climate summit: 1,000 anarchists arrested

http://www.telegraph.co.uk/earth/copenhagen-climate-change-confe/6799264/Copenhagen-climate-summit-1000-anarchists-arrested.html

Nearly 1,000 people were arrested in Copenhagen yesterday as anarchists and left-wing activists fought running street battles with police in the Danish capital as negotiations continued at the climate summit.

Cobble stones were thrown through the windows of the former stock exchange building and foreign office buildings in the city, but police made a large number of pre-emptive arrests under a controversial anti-hooligan law.

Suspected troublemakers were herded into a closed-off street, made to sit down and then tied up with plastic cuffs. They were then bused to a detention centre set up for the climate conference.

Police said four cars were set on fire during the evening. One policeman was hurt by a stone and a Swedish man injured by a firework.

“You don’t have to use that kind of violence to be heard,” said Connie Hedegaard, the Danish minister presiding at the United Nations talks. She condemned rioters after welcoming the main march at a candlelit vigil outside the conference centre.

One activist group accused the police of abuse complaining people had been forced sit on the road for hours in near-freezing temperatures.

The day’s main demonstration – a march involving 40,000 people – remained good natured but there remain fears that a hard-core of more violent demonstrators may still be waiting until later in the week, when President Barack Obama and other world leaders will arrive, to protest.

Inside the Bella Centre, delegates at the COP15 climate summit gathered around flat-screen TVs, showing both the police crackdown and the peaceful rally of environmental compaigners.

Despite the protesters’ urgings, there are growing fears that the summit could degenerate into an undignified global squabbling match with poor nations accusing their rich counterparts of forging a “backroom deal” at a secret dinner.

The split that the meeting has exposed between wealthy and impoverished nations was laid bare with news that ministers from a select clique of 40 countries were dining together away from the summit venue.

The meal, held behind closed doors at an undisclosed location, was viewed as a last-ditch attempt to cobble together a politically acceptable deal after a week of discussions marred by in-fighting, and “greener than thou” posturing over who is most to blame for global warming. Ministers are desperate to have a document ready when heads of state arrive for the final stages of the two-week conference on Thursday.

Leading them will be Gordon Brown, who has fashioned himself as a global champion in the battle against climate change, and who is arriving ahead of other top statesmen in a bid to stamp his authority on the meeting.

But so far officials from 194 countries have failed to make any substantive agreements on even the most basic goals.

Arguments are still raging over targets and deadlines for limiting global temperature rise, as well as the extent to which rich nations should fund green projects for poor ones, and whether emerging economic superpowers like China should balance green considerations against much-needed development.

Washington and Beijing have also traded insults over whether China should fund its own green measures or receive handouts financed largely by the West.

With signs of an irreconcilable split growing between the large and powerful and the small and poor, last night’s dinner, attended by countries including Britain, the US, China and India – was viewed as an attempt by mostly bigger, better-off nations to strike a deal in private.

“A lot of the deals are done in back rooms but there has to be transparency at the same time,” said Keith Allott, of the World Wildlife Fund, which claims smaller nations are being left out of the process.

Ed Miliband, the Energy and Climate Change Secretary, attempted to paint a brighter picture of the conference, insisting he was optimistic of a deal by the time heads of state arrived.

“This remains difficult in process terms because we have 100 and something leaders arriving on Thursday and we have to get to an agreement by the time they leave,” he said.

“The world is doing what it has never done before, which is trying to peak emissions and see them fall. It is not a done deal, it remains in the balance.”

Mr Brown plans to travel to Copenhagen on Tuesday evening, a day earlier than planned, in an attempt to help “seal the deal”. Downing Street sources said the Prime Minister was expected to hold one-to-one meetings with key figures including Ban Ki-Moon, the UN Secretary-General.

He will attend a formal dinner on Thursday and an all-day session on Friday before returning to Britain that night. A source said: “He remains concerned that the commitment for a deal is still short of what is required.”

A productive meeting at Copenhagen is widely seen as being crucial to the credibility of the global campaign on climate change. But the first week saw slow progress. Rich and poor repeatedly clashed over the need to reduce greenhouse gases, with Africa and the small island states threatening to walk out unless the developed nations committed to deeper cuts.

Many of the exchanges were bad-tempered, souring an event that aspires to be a vehicle for better global co-operation. He Yafei, China’s vice minister of foreign affairs, said he was “shocked” at US climate change negotiator Todd Stern’s assertion that Beijing did not need any American money. “It’s not just about the US and China, it’s the whole international community,” he said, insisting that climate change was historically the fault of the West. “The US is a developed country and China is part of the developing countries. To tackle global climate change we need to work together.”

Ian Fry, the representative of the tiny Pacific island of Tuvalu, has also claimed that even the more vulnerable countries’ intended target to restrict global warming to a rise of 1.5C will leave his island underwater because of rising sea levels.

However, the G8 and major developing economies believe it is realistically impossible to restrict temperature rises to less than 2C. They have also accused developing nations of demanding more “go green” cash than they actually need.

After seven days’ negotiating there is so far only a draft agreement on the table. The framework for a possible “Copenhagen Protocol” talks about cuts for developed nations of between 25 and 45 per cent by 2020, and calls on rich nations to pay their poorer cousins to reduce their emissions. But blanks remain in what negotiators term the “square brackets” – where officials must eventually insert precise figures and dates.

There is also the question of making the agreement enforceable in law. Britain has already suggested that a further summit will be necessary in six months’ time to address the issue.

Obama accepts Nobel prize with ‘difficult questions’ about war and peace

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Malaysian firm buys social network pioneer Friendster

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Philippines gunmen ‘release’ students and teachers

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Google hopes to turn the river into a canal

Before too long, expect to find anything that anyone puts on the Internet on Google within seconds: with luck, it might even be useful.

Real-time search has come to Google. The company has been hinting at this day for several months, most recently when it announced a deal to access Twitter’s “firehose” of data. But it presented its vision for real-time search before the media Monday at the Computer History Museum, claiming to have made a little history on its own.

Over the next few days, Google users will start to notice a box called “Latest results” on the main search results page for a topic that’s guaranteed to produce results. Google used “Obama” as its example, and searches for that query place a new box that automatically scrolls through recent “real-time” results associated with that topic from sources like Twitter, FriendFeed, and Google News, as well as new Web pages–such as this story–as they are created.

The concept is hot in the search world: Microsoft’s Bing also displays updates from Twitter and various blogs, although those results are not integrated with the main page. And Yahoo has also signed up with a company called OneRiot to throw its hat into the real-time search wars.

What’s less clear, however, is how useful this technology will be unless Google and others working on the problem can bring the same degree of relevance and trust to real-time results that it brings to regular search results. Google News can already confuse the casual user who wonders how and why those particular headlines were singled out, so how will relevancy work when a stream of news can knock a particularly authoritative result off your screen in seconds?

“It’s a very hard problem. Language understanding is still an unsolved problem,” said Amit Singhal, a Google Fellow and one of the key players in developing this product. “Not only do we have to understand what someone is saying, but we have to get to the deeper semantics of what is indeed true. We have to work through many issues. Truth ends up being a rather vague notion.”

In a way, this challenge is right up Google’s alley. The company is obsessed with speed when it comes to presenting results, agonizing over whether design changes that add tenths of seconds to page-loading times are worth the effort.

And now that seemingly everyone has a blog, a microblog, a social-networking profile, and commenting identity (or 29), new content on the Internet is being generated at an astounding pace. Google used to think it would be able to index all the world’s information in about 300 years, but CEO Eric Schmidt told CNET in November that one of Google’s greatest challenges in the decades ahead will be staying abreast of the explosion in content enabled by social media.

That’s why it’s a bit surprising that Google, the world’s leading search engine by a wide margin, hasn’t necessarily been a leader in this area. Marissa Mayer, vice president of search and user experience at Google, admitted Monday the company could have moved more quickly to organize the vast amount of data produced by services such as Twitter. Anyone who has tried to use Twitter Search knows that real-time search at the moment is like the regular Internet was 10 years ago: a blast of information that’s impressive in its scope but overwhelming in its usefulness.

But what Google is trying to do is leapfrog the notion of Twitter as the vanguard of the real-time content explosion. Twitter is undeniably hot at the moment, but new Web pages are generated constantly, especially as traditional media companies move online. One need only to think back to this summer when news reports of Michael Jackson’s death sent millions online looking for confirmation, staggering services such as Google and Twitter under that load.

Google said it plans to display all kinds of Internet content in its “Latest news” box. Google didn’t pay Twitter an undisclosed amount of money for access to its feed for no reason, however; the speed at which real-time content is generated can be harnessed much easier if search providers such as Google have that information pushed to them, rather than having to pull it out of the Web itself.

That raises the question of just how Google will index and rank real-time results. The company needs to develop the real-time equivalent of PageRank, which evaluates Web pages by the number of other pages that are linking to that page. That’s something Google “is beginning to experiment with,” Mayer said in a question-and-answer session following Google’s presentation.

There’s definitely some way to do that, but it certainly is not a simple problem. Someone with 15,000 Twitter followers is not necessarily as authoritative in one area as they are in another, and Google will have to figure out some way to evaluate this information to make it truly useful.

Until then, however, news junkies can entertain themselves watching the Latest results section spin with updates on Tiger Woods’ latest paramour or the glacial progress of Congress’ attempt to pass health-care reform legislation.

In a roughly 10-second period Monday afternoon on Google’s Trends page, where it is testing out the real-time service, the feed for “Pearl Harbor Day”–the second most popular trend on the Internet Monday behind the aforementioned Tiger Woods–produced a tweet about a Pearl Harbor Day poem, a news story on people who were in Pearl Harbor on December 7, 1941, and a gentleman celebrating Ruby Diner’s 27th anniversary with a $2.70 Rubyburger. (He also happened to note in his tweet that it was Pearl Harbor Day.)

(SEE MORE AT THE ORIGINAL SOURCE BY CLICKING HERE)

Citigroup Said to Push for Bailout-Payback Agreement This Week

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Help support the troops during the holidays. AnySoldier.com helps send letters/packages to soldiers currently serving our country.

From AnySoldier.com:

We have volunteer Soldier “contacts” on the “Where to Send” page. Click through the names and select the one(s) you wish to support. They list what the folks they represent want and need. We even have a search capability so you can easily identify what the troops need most.

All the Soldiers involved in this effort are military volunteers stationed in areas that are in harm’s way. You send your support (letters and/or packages) addressed to them and when they see the “Attn: Any Soldier^®” line in their address they put your letters and packages into the hands of Soldiers who don’t get much or any mail first. Everything is shared.

We have “What to Send“, “How to Send” and “FAQ” pages to help you properly send letters and packages, please read these. Be sure to also read our “New & Stuff” and “Success Stories” pages. This effort is 110% voluntary. You send your support, and maybe some stuff, directly to whatever unit or units you want.

We have a video you may watch free online, “Tango Mike!” which is a great overview of how the site works. The video is available for purchase HERE.

Spread the holiday joy to the men and women who put their lives on the line for the freedoms we experience daily in the United States. If all you can send is a letter thanking them, the time and thought will mean the world to them. God bless our troops, and happy holidays!

Scientific Link to Autism Identified

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10 states face financial peril

Dropping tax revenue, rising unemployment and yawning budget gaps are wreaking havoc in states from Arizona to Wisconsin, a new report shows.

NEW YORK (CNNMoney.com) — The same economic pressures that pushed California to the brink of insolvency are wreaking havoc on other states, a new report has found.

And how state officials deal with their fiscal problems could reverberate across the United States, according to the Pew Center on the States’ analysis released Wednesday.

The 10 most troubled states are: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

Other states — including Colorado, Georgia, Kentucky, New York and Hawaii — were not far behind.

The list is based on several factors, including the loss of state revenue, size of budget gaps, unemployment and foreclosure rates, poor money management practices, and state laws governing the passage of budgets.

These troubles have forced these states — as well as many others — to raise taxes, lay off or furlough state workers and slash services. These actions can slow down the nation’s recovery, especially since these 10 states account for one-third of the country’s population and economic output.

“Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers,” said Susan Urahn, managing director of Pew Center on the States.

In a separate study released Wednesday, the Center on Budget and Policy Priorities found that states will likely have to make steep cuts in their fiscal 2011 budgets, which start next July 1 in most states. That’s because the critical federal stimulus dollars will run out by the end of 2010.

These cuts could take nearly a percentage point off the national gross domestic product and cost the nation 900,000 jobs, the study found.

Here’s a summary of what Pew found is plaguing each of the states:

California: The Golden State’s housing collapse — and resulting unemployment surge — has plagued the state’s economy. The weakening economy prompted revenue to fall by nearly a sixth between the first quarters of 2008 and 2009. State lawmakers have limited ability to deal with California’s massive budget gap due to several voter-imposed restrictions, including requirements that all budgets and tax increases pass the legislature by a two-thirds majority.

Arizona: The state depends heavily on a growing economy to bring in tax revenue, and lawmakers don’t have a lot of leeway to address budget deficits thanks to voter-imposed spending constraints. Lawmakers relied on one-time fixes to balance its budget instead of making long-term changes.

Rhode Island: The Ocean State has among the highest unemployment rates in the nation and among the highest foreclosure rates in New England. High tax rates, big budget deficits and a lack of high tech jobs are hurting its chances to pull out of the doldrums. State government has a poor record of managing its finances

Michigan: The state never climbed out of the recession that started in 2001, and matters only became worse during the Great Recession. Two of the Big Three Detroit-based automakers went bankrupt in 2009, sending shockwaves through a state on track to lose a quarter of its jobs this decade. The recession accelerated drops in state revenue, and has left Michigan’s government trying to deal with today’s problems on a 1960s-sized budget.

Nevada: Nevada is one of the recession’s big losers as its gaming-based economy suffered. Year-over-year revenue has fallen for two consecutive years, a record. But changing tax laws is tough because some are written into the state constitution.

Oregon: Oregon’s leading industries, such as timber and computer-chip manufacturing, have been hit hard in the recession. Lawmakers have approved more than $1 billion in new taxes to keep it afloat. But voters in January will have the final say on another $733 million in new income taxes.

Florida: For the first time since World War II, Florida’s population is shrinking — bad news for an budget built on new residents flocking to the Sunshine State. Lawmakers raised $2 billion in new revenue this year, but could face a similar shortfall next year.

New Jersey: The Garden State, which has been plagued by years of fiscal mismanagement, spends more than it collects in revenue. The collapse of Wall Street, which supports about one-third of New Jersey’s economy, has only made matters worse.

Illinois: Since the last recession earlier this decade, the state piled up huge backlogs of Medicaid bills and borrowed money to pay its pension obligations. The state’s current budget still relies heavily on borrowing and paying bills late.

Wisconsin: Wisconsin has a long history of budget shortfalls. It also borrows frequently to cover operating expenses, among other measures. Unemployment is climbing as manufacturing, the state’s largest sector, sputters.

The Center on Budget and Policy Priorities, a liberal research group, says the states need additional federal fiscal relief to avoid budget cuts that will hurt both the economy and people. State and local spending accounts for about one-eighth of the GDP.

Already, less than five months into fiscal 2010, several states are looking at additional budget cuts. Rhode Island announced Tuesday it is facing a revenue shortfall for the current fiscal year of $130.5 million. Gov. Donald Carcieri said the state must examine its aid to local governments, since it has already cut personnel and social service programs.

And in California, Gov. Arnold Schwarzenegger said Tuesday that his state is facing a budget gap of up to $7 billion. The state will likely announce across-the-board spending cuts in January.

“So we just have to hang in there, tighten our belts and live within our means,” he said.

The center would like to see the federal government allocate another $50 billion, while economist Mark Zandi said about half of that would be needed. Congress should pass the additional aid now since states are currently crafting their fiscal 2011 budgets.

States received billions of dollars in funding from the Obama administration’s $787 billion stimulus package, including $87 billion for Medicaid and $48.3 billion for maintaining education and other key services.

The stimulus funds plugged about 30% to 40% of the budget gaps states were facing, and created or saved more than 300,000 jobs, said Iris Lav, the center’s senior adviser.

But the economic downturn is greater than administration officials expected when the Recovery Act was passed in February, Lav said. That’s why more assistance is needed now.

Budget projections show that states could face deficits as large as $260 billion in 2011 and 2012 after stimulus funding is exhausted. State economies usually take up to two years longer to recover after the nation’s fiscal health begins to improve.

New budget cuts and tax increases “will be a serious drag on the economy at just the wrong time,” said Mark Zandi, chief economist at Moody’s Economy.com.

Without assistance, the economy could slide back into a recession, he said.

A Lost European Culture, Pulled From Obscurity

Before the glory that was Greece and Rome, even before the first cities of Mesopotamia or temples along the Nile, there lived in the Lower Danube Valley and the Balkan foothills people who were ahead of their time in art, technology and long-distance trade. Read the full story