Americans could be forgiven for being galled by the cover illustration of a recent edition of the British-owned Economist magazine that displayed a map of the 50 US states with tricked-up names testifying to the true State of the Union - that is, near-broke, debt-laden.

For Iowa, read I.O.UWA; for Idaho, read Doh! And on it went - North Debtquota, Califoreclosia, Brokelahoma … the cheek! After all, Britain, too, faces a budget deficit equal to about 10 per cent of gross domestic product, and its economy actually went into reverse in the final quarter of last year after emerging from recession just a year earlier.

But the depth and breadth of America's fiscal woes are weighing heavily on the national psyche, underscored by an increasing urgency at every tier of government - Congress, the states, cities and local municipalities - to make ends meet in the aftermath of the ''Great Recession''.

Two years of cuts to public services are set to be trumped by even deeper incisions in 2011-12, as Washington's stimulus money dissipates and as a slow-paced recovery delivers little increase in tax receipts.

At the national level Republicans and Democrats remain at loggerheads over how deeply and how fast they must cut, raising the spectre of a government shutdown next Friday when funding for federal workers is due to run out. But across the nation, state governments are already hacking into spending, in moves that some economists fear could undermine the recovery and stymie job gains.