Unemployment would be a point LOWER (7.1%) if not for Cuts to Government - Wall Street Journal
Last edited Thu May 17, 2012, 08:25 PM - Edit history (2)
You've gotta hand it to the Corporate Lobbyist Party. They know how to wreck an economy.
First, under Dick Cheney's puppet, George "the Shrub" Bush, with the tax burden weighted too heavily on the middle class in favor of the wealthiest in the land (thus driving down demand), along with deregulation of the Financial Sector (Commodities Futures Modernization Act 2000 aka "Phil Gramm's Execrable Adventure") - which would have taken us into the second Great Depression if not for extraordinary steps taken such as TARP and ARRA (weakened though it was by GOP demands that one third be converted from stimulus to tax cuts). Then, as President Obama tried to provide some desperately needed stimulus the GOP forced cuts to Government programs some of which resulted in lay-offs of Policeman, Firemen, teachers and other public sector workers. As can be seen this has nicely furthered the GOP's campaign refrain that Obama can't handle the economy by pushing up the unemployment rate by a whole percentage point.
The Corporate Lobbyist Party sure knows how to wreck an economy whether they are running the executive branch or fighting those who are. As Ornstein and Mann have said in "It's Even Worse than it Looks" : The Republican Party has become an "insurgent outlier".
http://blogs.wsj.com/economics/2012/05/08/unemployment-rate-without-government-cuts-7-1/
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The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.
But the survey of households that the unemployment rate is based on suggests the government job cuts have been much, much worse.
In April the household survey showed that that there were 442,000 fewer people working in government than in March. The household survey has a much smaller sample size than the establishment survey, and so is prone to volatility, but the magnitude of the drop is striking: It marks the largest decline on both an absolute and a percentage basis on record going back to 1948. Moreover, the household survey has consistently showed bigger drops in government employment than the establishment survey has.
The unemployment rate would be far lower if it hadn’t been for those cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.
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note that the OECD puts the unemployment rate range for the U.S. at full employment at 4% to 6.4%. This is the range of unemployment rates that would basically not cause people to be upset and feeling that the unemployment situation was untolerable. If you then compare the current unemployment rate of 8.1% (with government cuts) tothe 7.1% rate we would be experiencing without the Government cuts you see that the GOP have made the unemployment situation twice as bad as it would have been (based on the unemployment rate compared to the unemployment rate at full employment):
Full Employment Unemployment range [font color="white"]...............................[/font]4.0%[font color="white"]..............[/font]6.4%
Rate without Government cuts[font color="white"]..........................[/font]7.1%[font color="white"].........[/font]178%[font color="white"]..............[/font]111%
Rate with Government cuts[font color="white"]...............................[/font]8.1%[font color="white"].........[/font]203%[font color="white"]..............[/font]127%
Ratio of Unempl rate with cuts to Unempl rate w/o cuts[font color="white"].........[/font]114%[font color="white"]..............[/font]114%[/pre]
As you can see, the unemployment rate - with the Government cuts - relative to the unemployment rate range at Full Employment is twice (114% greater than) the ratio of the Unemployment rate - without the Government cuts - relative to the Unemployment rate range at Full Employment.
{Note: this article was first noted by Alan Grayson, here, but I thought it was important enough to bear repeating and in its own thread}
= new reply since forum marked as read
