Government payrolls grew in the early part of the recovery, largely because of federal stimulus measures. But since its postrecession peak in April 2009 (not counting temporary Census hiring), the public sector has shrunk by 706,000 jobs. The losses appeared to be tapering off earlier this year, but have accelerated for the last three months, creating the single biggest drag on the recovery in many areas. ...
If governments still employed the same percentage of the work force as they did in 2009, the unemployment rate would be a percentage point lower, according to an analysis by Moody’s Analytics. At the pace so far this year, layoffs will siphon off $15 billion in spending power. Yale economists have said that if state and local governments had followed the pattern of previous recessions, they would have added at least 1.4 million jobs.
Let's unpack the implications of this article:
1. The way to recovery is for government to hire more people, so the government hires can spend more. Government head count reductions are thus a "drag" on the recovery, which must be happening -- after all, King Barack "Big Ju-Ju" Obama is on his throne.
2. The government (federal, state, and local) has billions of dollars just sitting around, which it could easily use to hire more people.
Writers for the Times and most of the mainstream media cannot understand the basic principle that a real recovery can only occur when wealth is created by companies and their employees, when they produce goods and services they can successfully market.
Putting more government time servers into pod farms creates no wealth. It's a dole, a simple transfer payment from those who can be taxed to a politically selected group of recipients.
The government has no money. It has $13 trillion (unless the deficit has gone up by a few trillion since I checked last) less than nothing, and that's only at the federal level. Many states and localities are at an equivalent level of fiscal embarrassment. To hire more people, states and localities (which, unlike the Fed, can't "create" money out of thin air) would either have to tax more or borrow more.
Chances are, they could do neither; would you lend California a few hundred million? But even if they could, it wouldn't solve anything. Why prime a pump while draining the water from the well? That's it -- there's no "on the other hand."
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