Fiscal and monetary policy are under the purview of the federal government. Individual states are stuck between a rock and a hard place - needing to ramp up spending to respond to the crisis, while receiving much less tax revenue. States can only respond by taking on more debt, further compounding the cause of this financial jam. Hence red states passing the pain downwards by turning the screws on workers. The current response just takes us further into the debt spiral, making the next crisis even worse - if we're lucky enough to have a next one!