Why Stagflation Is Quietly Reshaping Local Government Budgets

Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes · May 28, 2026 · 7m · transcript

Episode 17 of Stagflation Conversations with Fexingo digs into a surprising casualty of the current stagflation environment: municipal and state budgets. Lucas and Luna examine how persistent inflation — core CPI at 3.3% in April — and sluggish real GDP growth of just 1.6% are forcing local governments into unprecedented trade-offs. They focus on the case of California's 2026-27 budget gap, estimated at $45 billion, as cities from San Francisco to Fresno grapple with rising pension costs, falling commercial property tax revenue, and higher borrowing costs. The hosts explain why the…