WASHINGTON -- The budget woes of state and local governments may not be as bad as many people think, and probably will not do much to impede the unfolding recovery, according to an analysis prepared by Goldman, SAchs & Co.

The report, written by Robert Giordano, director of economic research, contradicts current thinking by many private economists, who contend that states and localities are facing serious economic problems that could stall or derail the economic recovery.

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