Atlantic City is taking a gamble that firing some of its city workers will shore up its deficit. Economists say cuts by state and local governments are creating a drag on the economy. Saul Loeb/AFP/Getty Images hide caption

itoggle caption Saul Loeb/AFP/Getty Images

Freddie Mac and Fannie Mae are quickly becoming the most expensive part of the financial meltdown. As of April, the two companies were sitting on more than 160,000 foreclosed homes. Alex Wong/Getty Images hide caption

itoggle caption Alex Wong/Getty Images

The city incinerator in Harrisburg, Pa., is almost $300 million in debt. And because the city backed the Harrisburg Authority, which owns the facility, it is responsible for the $68 million bill this year. Tamara Keith/NPR hide caption

itoggle caption Tamara Keith/NPR

Following an interfaith service in Grand Isle, La., people gather at a berm overlooking the ocean and hold hands. Tamara Keith/NPR hide caption

itoggle caption Tamara Keith/NPR