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Both national and state governments often grapple with budget deficits, which arise when expenditures exceed revenues, leading to increased borrowing and debt. Additionally, they face challenges in funding essential services like education, healthcare, and infrastructure, particularly during economic downturns. The growing pension liabilities and healthcare costs for public employees further strain their financial resources, complicating fiscal management. Lastly, variations in tax revenues and economic disparities among states can exacerbate these financial issues.

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