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Posted at 1:14 PM ET, 03/ 9/2011

Where’s halfway on spending?

By Ezra Klein

John Boehner’s spokesman Michael Steel e-mails to ask whether “the White House is meeting Republicans ‘halfway’ on spending cuts — as they said again in their Statement of Administration Policy on H.R. 1 [pdf] today — are they going to destroy between 100,000 and 350,000 jobs, depending on whose number you use?”

It depends what you mean by halfway, I guess. Senate Democrats have coalesced around a spending bill that cuts government funding by about $6 billion in 2011 — quite a bit less than the $60 billion or so that Republicans are proposing. Steel notes that that isn’t anywhere near halfway — at least if you’re starting from a baseline of zero cuts, and he’s right. I’d use a different baseline: I think government spending should rise substantially this year in an effort to accelerate our recovery. I’d love to see another $200 billion in infrastructure investment and tax cuts, perhaps paired with some serious efforts at long-term deficit reduction.

But the administration isn’t using my baseline. Indeed, they’re not arguing for further spending at all. They’re unwisely arguing that they’re also for cuts, and so from their baseline, Steel is right: They’re not meeting the Republicans halfway, or anywhere near it. And a good thing, too. If they were, then as Steel says, they’d be working to destroy between 100,000 and 350,000 jobs.

By Ezra Klein  | March 9, 2011; 1:14 PM ET
Categories:  Budget  
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Comments

I would love to see a calculation of the aggregate lob losses that will result this year from the cuts in spending by state and local governments, and then add that number to the additional unemployment that would result from the House Republican cuts.

Then let's have a look at the impact on the economy of the lower demand that will result from these hundreds of thousands of new persons who will be without a paycheck. Then let's also look at the vicious cycle of government deficits, as those same unemployed no longer contribute tax revenues, and as they place additional strains on government social services.

But, as Boehner says: "So be it." The anti-employment agenda this year is surreal.

Posted by: Patrick_M | March 9, 2011 1:28 PM | Report abuse

Ezra, why should we believe these job-loss predictions are any more accurate than the CEA's prediction that the stimulus would bring unemployment below 8%? I would have expected you to approach economic projections with a bit more skepticism after having been so far wrong before.

Posted by: tomtildrum | March 9, 2011 1:46 PM | Report abuse

Whether cutting the government's budget destroys 0; 100,000; 700,000; or more jobs, this is a short-term problem (and really bad for those affected). But if the US is spending so much more than it's bringing in, those jobs shouldn't have been created at all. They are an artifact of deficit spending.

We can't continue to take money from foreigners and our children to create jobs today. Those jobs being destroyed are displaced from the future and the private sector (because the foreign creditors would otherwise invest the money in the private sector).

Posted by: FroggyJ4 | March 9, 2011 2:08 PM | Report abuse

I think Democrats are reacting to Republican proposals rather than proactively coming out with their own bold plans because Democrats didn't have a strategy going into the 2010 campaign. They should have had something better than "Don't give them the keys back" they should of offered a strategy for the next two years.

So now Republicans have they keys and Democrats are in the back seat...even though they control the Senate and the White House.

Posted by: Mazzi455 | March 9, 2011 2:19 PM | Report abuse

Ezra,if govt. spending creates jobs then why did we lose all those jobs the last 2 yrs.?Govt. has spent trillions it had to borrow or print the last 2 yrs.Govt. spending does not "create" jobs.When are the journolisters going to stop the misinformation?Also your face hair is getting darker.It might be time to shave.

Posted by: pacsandi | March 9, 2011 2:22 PM | Report abuse

What is halfway between the ~1.8 million teachers we had in the 60s and the ~3.4 million teachers we have in 2011?

2.6 million...when are we gonna FIRE 800,000 teachers?

Posted by: krazen1211 | March 9, 2011 2:24 PM | Report abuse

@krazen1211

We'll go back when the U.S. population shrinks back to 179 million like we had in the 60s, Einstein.

Sheesh.

Posted by: adamjohn82 | March 9, 2011 2:34 PM | Report abuse

"We can't continue to take money from foreigners and our children to create jobs today. Those jobs being destroyed are displaced from the future and the private sector (because the foreign creditors would otherwise invest the money in the private sector)."

You know, we could always raise revenues, in part by rolling back tax cuts irresponsibly enacted in 2001 and 2003 and renewed last year. Of course this won't fix everything - no one solution will - but to pretend that this simply isn't an option, especially for someone who purports to care about debt falling on our children and in the hands of foreigners is ridiculously disingenuous.

Posted by: arm3 | March 9, 2011 3:00 PM | Report abuse

@Patrick,

its funny i was in my car a bit ago and Senator Thune was on CSPAN radio speaking of how Christina Romer at one point stated that when debt is as it is right now it costs us 1% of GDP which equates out to one million jobs. Are you going to take that into account in your analysis you'd like to see done?

Posted by: visionbrkr | March 9, 2011 3:34 PM | Report abuse

visionbrkr,

I was not aware that you and your fellow Republicans now consider Christina Romer's opinions to be definitive. I guess I missed that change.

Accepting the premise for the sake of argument, let's bear in mind a few things. The cuts on the table don't eliminate the debt. So it is not as though there is any magic theory by which a million jobs will appear out of nowhere by reducing funding to Planned Parenthood, the EPA, Pell Grants, heating oil assistance to low income seniors, etc.

Likewise, the USA is not "broke," as Boehner insists. We still have people lining up to provide funds at an interest rate of 1% or less.

Everyone wants to lower the deficit, and I would fully support taking measures to reduce defense spending, control the rising costs of Medicare and Medicaid, and to capture more revenue from the top 2%. But I concur with Ezra, that when we can still raise money at a 1% interest, and when we have a 9% unemployment rate (which takes the energy out of the recovery already), it makes little sense to be intentionally putting large numbers of additional people out of work.

Posted by: Patrick_M | March 9, 2011 3:51 PM | Report abuse

@Patrick,

Truthfully I don't believe Christina Romer but the main question is why do you (assuming you do?) For the Republicans I'm sure its just talking points same as when Ezra keeps mentioning the 700k jobs lost from the potential cuts from the House Republicans plans.

The main question is when do we need to get serious about it? The national debt now grows at a rate of $4 billion per day so the Democrats plan basically takes care of a day and a half of debt. The deficit this month was $223 Billion alone.

How much more does it cost us to address it now as opposed to later. President Obama addressed some cuts in the the 2012 budget but if the economy isn't improved by then would you suggest we forgo those cuts for the sake of jobs? Where are your diminishing returns with respect to this?

How many more years are we going to be dealing with the long term deficit because of inability to act now?

And as for taxing the 2% as i've said before have it at, but we both know that won't come close to closing the deficit gap that's widening by the day. Also as I've said I'm all for ending the wars too but again that only stop the bleeding. We could defund the Dept of Defense and we'd still have almost a Trillion dollar deficit this year at the rate we're going.

Please tell me when it does get serious to you?

Posted by: visionbrkr | March 9, 2011 4:14 PM | Report abuse

and the fact that we can convince other countries to still loan us at 1% doesn't change the fact that at some point the tab comes due and must be paid.

Posted by: visionbrkr | March 9, 2011 4:17 PM | Report abuse

"Please tell me when it does get serious to you?"

Evidently you did not read the comment to which you are responding. It gets serious to me when we actually talk about the actual causes of the deficits we are running, and when we stop pretending that the program cuts that are on the table will have any meaningful impact in long term fiscal health.

We'll get serious when we talk about reining in the costs of medical care. We'll get serious when we talk about scaling back our insane defense spending. We'll get serious when we talk about a more progressive set of tax rates and fewer loopholes. We'll get serious when we realize that our government had a balanced budget just a decade ago, delivering roughly the same services to the public, so our first order of business is to do everything possible to get people working again and growing the economy.

The current austerity fetish is not helpful to the economy or to meaningful deficit reduction. It is just a trojan horse for dismantling specific programs that conservatives don't like, like environmental protection, safety net programs for the poor, and public education.

Posted by: Patrick_M | March 9, 2011 4:29 PM | Report abuse

What Patrick M said.

Posted by: MosBen | March 9, 2011 4:34 PM | Report abuse

"We'll go back when the U.S. population shrinks back to 179 million like we had in the 60s, Einstein."

Public school enrollment from 1969-2009 increased just 10.8%, from 46.15 million to 51.15 million. Remember the baby boom?

Table A-1.

http://www.census.gov/population/www/socdemo/school.html

Using Krazen's numbers, that suggests we need about 2 million teachers to match the student/teacher ratio which prevailed in 1969.

The nice part about privatization is that we don't have to argue which number of teachers is the "right" number. It could be 2 million, or 4 million, or any other number.

Posted by: justin84 | March 9, 2011 5:36 PM | Report abuse

"We'll go back when the U.S. population shrinks back to 179 million like we had in the 60s, Einstein.

Sheesh."


Here friends we have the example of the failures of the education policy of the teachers unions.

Here is the truth that debunks the leftist lies. Note the size of the pupil:teacher ratio.

http://nces.ed.gov/programs/digest/d09/tables/dt09_064.asp

Posted by: krazen1211 | March 9, 2011 9:47 PM | Report abuse

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