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Two Important New Studies: Spending = Jobs

Two Important New Studies: Spending = Jobs > Political Opinion > Political Views > DLU Articles > Democratic Liberal Umbrella

[important]Two Important New Studies: Spending = Jobs[/important]

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It’s going to be impossible for Obama and the Democrats to say what I’m about to write here and get any traction with it, so just to be clear, I know that going in. The political discourse is built around sound-bites that seem credible, not facts. But these are facts. Please read.

From the Economic Policy Institute comes a report today on public-sector job loss, which as you know is a favored topic of mine. The number of public-sector workers has decreased in this recession from 7.3 workers per 100 adults, an average the United States has maintained since the late 1980s, to something well under that. If we had stayed at the 7.3 figure, and given that population has grown by nearly 7 million since June 2009, that would have meant 1.1 million more public-sector workers on payrolls.

Michael Tomasky – Newsweek/Daily Beast special correspondent is also editor of Democracy: A Journal of Ideas.

And that, of course, would have had a knock-on effect in the private sector. EPI:

…public-sector job cuts also cause job loss in the private sector, for a couple of reasons. First, public-sector workers need to use inputs into their work that are sourced by the private sector. Firefighters need trucks and hoses, police officers need cars and radios, and teachers need books and desks. When public-sector jobs are lost, it stands to reason that the inputs into these jobs will fall as well, and indeed research shows that for every public-sector job lost, roughly 0.43 supplier jobs are lost.[3]

Second, the economic “multiplier” of state and local spending (not including transfer payments) is large – around 1.24.[4] This means that for every dollar cut in salary and supplies of public-sector workers, another $0.24 is lost in purchasing power throughout the rest of the economy. Teachers and firefighters stop going to restaurants and buying cars if they’re laid off, which reduces demand for waitstaff and autoworkers and so on. Add these two influences together (supplier jobs and jobs supported by this multiplier impact) and roughly 0.67 private sector jobs are lost for every public sector job cut.   This means that the public sector being down 1.1 million jobs has likely cost the private sector 1.1 million*0.67 = 751,000 jobs.

Bottom line: If all this had happened, the unemployment rate would be about a point lower than it is today. Yes, the deficit would be higher. But 1.85 million more people working would be a good thing.

Second, from Brookings’ Hamilton Project comes a study finding that states that increased their per-capita public expenditures during the recession suffered less job loss. A lot of these increases in state spending were tied to…yep, the stimulus bill:

Those states that increased per-capita expenditures the most experienced the smallest rises in unemployment rates, while those that increased expenditures the least experienced the largest rises in unemployment. Although state governments certainly played a role in shaping their economic situations, much of the increased state spending was financed by the American Recovery and Reinvestment Act (the federal stimulus plan), which put significant amounts of money directly into depleted state coffers.

Yes, EPI is left-leaning. Hamilton is center-left. Make what you wish of that. But the facts are the facts. It’s just a shame that there isn’t more room for them in this town.

Like The Daily Beast on Facebook and follow us on Twitter for updates all day long.

Newsweek/Daily Beast special correspondent Michael Tomasky is also editor of Democracy: A Journal of Ideas. Follow Michael Tomasky on Twitter at @mtomasky.

For inquiries, please contact The Daily Beast at editorial@thedailybeast.com.


[important] Re-elect the President and Turn Congress – Blue! [/important]

Let’s keep this momentum alive! As Clint would say [Make my day!], please make our day! Support President Obama and the Democratic Party! Make your contributions – Today!


If you’ve noticed, larger corporations and their Conservative, Lobbyist, Hench men are spending copious amounts of money to buy this election. These special interest groups are willing to spend over a billion dollars to buy this election, to oust the president and replace him with a controllable puppet. You have to ask yourself why that is. Why are so many outside groups spending all this money in this election? You know this, you’re informed and people who are in the know don’t vote Republican. But, the reasons are: governmental Nancy Pelosiagencies are putting the squash to their illegal practices, trying to reverse outsourcing of jobs, taxation and what I call; causing “Life Changing Events” in their lives. Incredibly, these people, groups are greedy and they, literal don’t care how these practices are affecting people at the bottom of their food chain. Not to mention, there’s this President, a minority at the top of the spectrum and that can’t be in their eyes. He can’t be the one causing their “Life Changing Events” and they can’t have that! This explanation is plain and simple; however, I think you get the message.

We are the people of America and America should be run by the people and not by corporations and their Hench men – lobbyist and special interest groups. We can’t allow them to drown-out the voices of the 98% of us! Please listen, hear me and this is reality “We can’t stand by while America is sold to the highest corporate bidder. We can’t allow the Supreme Court to just say: Your concerns don’t matter – the 1% and Corporations rule. Go home.” Sounds like Dorothy in the land of OZ – Go home! So, what can we do? What’s the alternative? The answers to those questions are: We wake-up, get the facts and vote in droves for President Obama and his administration that, in their eyes, is causing their “Life Changing Events” – vote Democratic this November 2012!

Eric HolderYou know, I haven’t been pushing this issue, however time is getting short and November is just around the corner. I would like to contribute to the president’s campaign in the name of Democratic Liberal Umbrella and I can’t do this all alone. I need my friends at times like this, especially, when the opposition wants to destroy what the president has accomplished and the fabric of the American people. Do you see how they’re treating the Attorney General Holder with this in contempt of Congress charge? AG Holder along with President Obama are targets, they both have a big zero on their backs from the Right-wing conservatives and from AG Holder’s stand-point; he’s advancing equal rights, LGBT, defending voting rights among other things vehemently opposed by the Right-wing conservatives. I’m not at all trying to down-play the death of the ATF Border Patrol officer Brian Terry; not at all, death in the line of duty is catastrophic for his family and for the community at large! Well, that’s another topic in itself!

The Democrats and Democracy had a good day June 28, 2012 with the Supreme Court ruling on the constitutionality of ACA, in spite of the in Contempt of Congress charge on AG Eric Holder by the GOP! Let’s keep this momentum alive!

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We need people to come together and support the President in this election of 2012, the push to turn Congress and this Country – Blue; strengthening our democracy. Your contributions are Fight Backvital to our success — take this opportunity and donate today. In addition, the GOP is spending 1 billion dollars to remove Obama from the office of: POTUS! This group consisting of K och’s, K arl Rove and in the shadows the K han because Obama has caused “Life Changing Events “- for them! Let’s make these events last four more years for the three K’s!

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