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cosNow this is funny.
The Economic Policy Institute's "economic snapshot" for this week, "Sluggish private job growth indicates failure of tax cuts", looks at whether the Bush tax cuts have led to lots of new jobs being created. Remember, those tax cuts were supposed to pull us out of recession (well, first they were gonna be returning part of the surplus the government had too much of, and then they were going to prevent us from going into recession, and then they were gonna pull us out of recession).
When job "recovery" first started in 2004, there were many months in which we had job "growth" that was actually based entirely on new public sector jobs. Obviously, tax cuts don't create new public sector jobs. But more recently, in 2005, we started consistently getting more pivate sector jobs each month. Could the tax cuts have led to that?
Now, I remember when those tax cuts were first proposed, a lot of people looked at how much money the government was giving up, how many jobs they projected would be created, and came to the correct conclusion that the government could create a lot more jobs simply by using that money to hire people. But of course, conservatives don't like that sort of economy, based on government spending. It's all about free enterprise and the private sector.
Except... that's what they did. In addition to giving up gobs of money through tax cuts (mostly money held by wealthy people), the Republicans increased both defense spending and non-defense discretionary spending by huge amounts. Clearly, when the government spends a lot of money, it generates jobs. If they're buying a bunch of new tanks and personnel carriers, for example, well, GM or Ford is gonna get a lot of business, and hire people to make those vehicles. And so on. So EPI got estimates from the government about how many new jobs were likely created by this spending since 2001, and compared it to overall job growth:
I don't find anything inherently wrong with that. Business goes through cycles, and there are years when the government has to step in and spend to make up the difference, until the next up cycle. But tax cuts? Because of the tax cuts, the government has had to depend very heavily on borrowing - possible in large part because China has been buying up gobs of US debt.
Or, economist Max Sawicky puts it,
The Economic Policy Institute's "economic snapshot" for this week, "Sluggish private job growth indicates failure of tax cuts", looks at whether the Bush tax cuts have led to lots of new jobs being created. Remember, those tax cuts were supposed to pull us out of recession (well, first they were gonna be returning part of the surplus the government had too much of, and then they were going to prevent us from going into recession, and then they were gonna pull us out of recession).
When job "recovery" first started in 2004, there were many months in which we had job "growth" that was actually based entirely on new public sector jobs. Obviously, tax cuts don't create new public sector jobs. But more recently, in 2005, we started consistently getting more pivate sector jobs each month. Could the tax cuts have led to that?
Now, I remember when those tax cuts were first proposed, a lot of people looked at how much money the government was giving up, how many jobs they projected would be created, and came to the correct conclusion that the government could create a lot more jobs simply by using that money to hire people. But of course, conservatives don't like that sort of economy, based on government spending. It's all about free enterprise and the private sector.
Except... that's what they did. In addition to giving up gobs of money through tax cuts (mostly money held by wealthy people), the Republicans increased both defense spending and non-defense discretionary spending by huge amounts. Clearly, when the government spends a lot of money, it generates jobs. If they're buying a bunch of new tanks and personnel carriers, for example, well, GM or Ford is gonna get a lot of business, and hire people to make those vehicles. And so on. So EPI got estimates from the government about how many new jobs were likely created by this spending since 2001, and compared it to overall job growth:
- New jobs resulting from increased defense spending: 1.495 million
New jobs resulting from new non-defense discretionary spending: 1.325 million
... new jobs since 2001 as a result of government spending: 2.82 million
Total new jobs created in the private sector since 2001: 2.01 million
I don't find anything inherently wrong with that. Business goes through cycles, and there are years when the government has to step in and spend to make up the difference, until the next up cycle. But tax cuts? Because of the tax cuts, the government has had to depend very heavily on borrowing - possible in large part because China has been buying up gobs of US debt.
Or, economist Max Sawicky puts it,
- "The upshot is that the triumph of Republican-conservatarian economic policy consists of an expansion of government jobs financed by loans from the Communist Peoples Republic of China."
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I think the type of 'jobs' that one aims for are ones that increase economic output. Public-sector jobs can't increase economic output because they derive their income from draining wealth from the private sector. If the private sector doesn't have wealth to drain, the public sector can't do anything at all. Whereas if the public sector has no revenue at all, the private sector can still function perfectly well (albiet it would have to adopt the role of some public sector services).
On a macro scale, this is why we see private-sector-dominated economies dwarf public-sector-dominated economies in terms of per-capita wealth.
Don't get me wrong, I think the Republican economic policy is horribly misguided.. but then again, I think the economic policies of virtually all administrations since late Thomas Jefferson have been horribly misguided.
huh?
Re: huh?
Re: huh?
I don't know why you're going on about whether public sector jobs create "real" economic growth. All of the numbers above are about private sector jobs. And it's the Bush administration touting that as "strong economic growth" - Sawicki is poking a hole in their claims by pointing out that the growth they're touting is based on the antithesis to their philosophy.
And then comes this puzzler: Therefore, the argument that tax cuts led to a drop in the economy is one based in false premises. What "argument that tax cuts led to a drop in the economy" are you talking about? Who made such an argument? And what premises is it supposedly based on?
I ran this by a few other people, just to make sure I wasn't missing something, but they all agree: you're really not making any sense here. It's not a matter of whether you agree or disagree with me, it's a matter of not comprehending what's being said in the first place.
P.S. Who are you? Why comment anonymously?