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ThePlumLIneGS whorunsgov plumline
Posted at 05:18 PM ET, 07/06/2012

Again: Republicans are mostly getting their way on the economy

A must-read for jobs day: The new big-picture analysis from the Economic Policy Institute’s Josh Bivens and Heidi Shierholz that assesses just how much of the gap between where we are and full employment is attributable to cuts in government jobs.

The answer? Over 20%, or about 2.3 million jobs. Half of those jobs would be in the private sector.

Their analysis counts four effects from government job cuts. One is just direct job losses; that’s the 600,000 public jobs lost, almost all at the state and local levels, that you may have heard about. But as they note, that’s only the beginning.

During normal times, public sector jobs grow gradually with the population, so there’s another chunk of missing job growth in addition to public sector jobs lost. There’s also the jobs lost because all those public sector employees normally use stuff that they have to buy, and also buy stuff because they’re employed. And they also count in jobs lost thanks to the multiplier effects of transfer payments, which is certainly a real thing although not as closely connected to jobs.

There may be yet another effect here that is not included in their calculations. Bivens and Shiefholz account for how much money a laid off teacher doesn’t spend, and how that hurts the economy. But what of all those teachers, prison guards, cops, and firefighters (and even more boring government bureaucrats) who don’t get laid off — but fear for their jobs and curtail their spending accordingly?

Who is at fault for all this? That’s easy. It’s fair to criticize Barack Obama and Democrats for failing to deal with this in early 2009 — they should have passed automatic stabilizers to prevent the problem. But Democrats have been pushing for three years for federal money to prevent these layoffs, and Republicans have consistently blocked them. Had Obama and the Democrats had their way, we would have a lot more people working (and, to be fair, a somewhat larger federal budget deficit). They have not gotten their way.

The 2.3 million jobs we’re talking about here are a direct result of Republicans getting exactly what they want; indeed, the preference of Republican hard-liners, which Mitt Romney has endorsed, is for hundreds of thousands of additional public sector layoffs.

There’s really no other way to say this: Romney and Republicans want more government workers to be laid off, and they are already mostly getting their way. And if a bad economy helps them politically, they may wind up benefiting from it.

By  |  05:18 PM ET, 07/06/2012

 
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