A second headwind, also quite important here in Rhode Island, has come from changes in fiscal policy to reduce budget deficits. At the federal level, the fiscal stimulus of 2008 and 2009 supported economic output, but the effects of that stimulus faded; by 2011, federal fiscal policy actions became a drag on output growth when the recovery was still weak.
Meanwhile, states and municipalities, faced with serious budget problems due to the recession and required by law to balance their budgets, were forced to cut spending and raise taxes. The recovery has by now boosted tax revenue in most states, though Rhode Island, I know, is among those areas still facing considerable budget strain.