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Title: Usually a job engine, localities slow US economy (467K govt. jobs gone)
Source: AJC
URL Source: http://www.ajc.com/business/usually-a-job-engine-968424.html
Published: Jun 6, 2011
Author: AP
Post Date: 2011-06-06 11:13:29 by go65
Keywords: None
Views: 8625
Comments: 29

WASHINGTON — In a healthy economic recovery, states and localities start hiring, expand services and help fuel the nation's growth.

The U.S. economy is moving ahead, however fitfully. Yet state and local governments are still stuck in recession. Short of cash, they cut 30,000 jobs in May, the seventh straight month they've shed workers. Rather than add to U.S. economic growth, they're subtracting from it.

And ordinary Americans are feeling it — from reduced services to fewer teachers, police officers and firefighters.

The Great Recession officially ended two years ago this month. By the same point during previous recoveries, state and local governments were engines of growth: In the two years after the 1990-91 recession ended, for example, they'd added 430,000 jobs. At the same point after the 2001 recession ended, they had added 249,000.

This time is different. More than 467,000 state and local government jobs have vanished since the recession officially ended in June 2009, including 188,000 in schools.

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Begin Trace Mode for Comment # 5.

#2. To: go65 (#0)

WASHINGTON — In a healthy economic recovery, states and localities start hiring, expand services and help fuel the nation's growth.

WRONG.

Government spending takes capital away from the market-place, stifling continued growth.

When you fail on the first sentence, the rest of the article is sure to be equally flawed.

Capitalist Eric  posted on  2011-06-06   12:02:07 ET  Reply   Untrace   Trace   Private Reply  


#3. To: Capitalist Eric (#2) (Edited)

Government spending takes capital away from the market-place...

What is the government "spending" money on?

war  posted on  2011-06-06   12:03:45 ET  Reply   Untrace   Trace   Private Reply  


#4. To: war (#3)

From the article:

...states and localities start hiring, expand services...

What, your lips too tired to read this morning?

Capitalist Eric  posted on  2011-06-06   12:12:50 ET  Reply   Untrace   Trace   Private Reply  


#5. To: Capitalist Eric (#4)

...states and localities start hiring, expand services...

So they actually spend the money...it doesn't disappear.

Are jobs part of the market place in your world? Services?

war  posted on  2011-06-06   12:24:53 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 5.

#6. To: war (#5)

So they actually spend the money...it doesn't disappear.

Are jobs part of the market place in your world? Services?

The current GDP calculation model is as follows:

GDP = private consumption + gross investment + government spending + (exports h2; imports), or Y = C + I + G + (X h2; M)

Unfortunately, the model is grossly flawed. Government spending, or G, assume 100% efficiency. That is, every dollar that is spent (which is of course, taxed from the rest of the factors), is exclusively used to productive purposes. That is, it isn't wasted.

Since we know government DOES waste money, as government spends more, it ends up being a drag on the economy.

If government spending increases not as a function of tax receipts, then it can only come through creating more money (digitally, or through the use of the printing press). In this case, GPD would go up, but so would inflation, as a natural result. Of course, we're seeing this right now, as "Helicopter Ben" Bernanke and his fellow-Keynesian dimwits print the dollar into oblivion, and the GDP keeps from going TOO negative (without QE 1&2, the truth would already be obvious).

Capitalist Eric  posted on  2011-06-06 12:39:59 ET  Reply   Untrace   Trace   Private Reply  


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