Republican Mythbusters #2: Government spending and jobs
Back in 2009, when Congress agreed to President Obama’s stimulus plan, it received only 3 Republican votes in the Senate (and that was only because Democrats agreed to remove tens of billions of dollars in much needed aid to support struggling state governments). At that time, and increasingly ever since, we’ve heard the same Republican talking point over and over again: the stimulus package was a failure because government spending doesn’t create jobs.
Of course, we know that this is just dead wrong. The bipartisan Congressional Budget Office estimates that, just in the second quarter of this year alone, between 1 and 3 million people owed their employment to the stimulus plan. And, judging from their behavior, even the Republicans themselves know that this is untrue. Ever since 2009, we’ve seen a ton of examples of Republican legislators taking credit for government created jobs in their home districts while, at the same time, bragging about their opposition to the bill that created those jobs in the first place.
And now, in the super-committee charged with deficit reduction, we are witnessing another great example of Republicans trying to have their cake and eat it too. As a way out of the debt ceiling fiasco this past summer, Congress created a deficit reduction super-committee charged with coming up with roughly 1.2 trillion dollars in deficit reduction over the next ten years. They also gave the super-committee a Thanksgiving deadline that, if missed, would trigger automatic cuts of 600 billion dollars from discretionary spending and 600 billion from defense.
Not surprisingly, the super-committee is nowhere near reaching an agreement. As usual, Democrats have been willing to cave on basically everything (actually proposing deeper cuts to Medicare than the Republicans), in exchange for some minor concessions from Republicans on taxes. And, true to form, Republicans have not only refused to entertain any proposal involving tax increases, but they’ve actually proposed 800 billion dollars in tax cuts to be paid for with even deeper cuts.
Now that it’s become clear that a compromise is not going to be reached, Republicans are working to pass legislation that would do away with the 600 billion in defense cuts and replace them with deeper cuts to “other unspecified parts of the federal budget." And what’s the supposed rationale behind this move? You guessed it: Repubilcans are now making the argument that cutting defense spending will kill jobs.
Clearly Republicans don’t even believe they’re own rhetoric. When they want tax cuts, they claim that government spending can’t create jobs. When they want military spending, they acknowledge that it can. Now, to be fair, Republicans have a response to this. They claim that defense spending is unique because there is no alternative to this kind of spending in the private sector (they seem to be forgetting all of the private contractors we grossly overpaid to fight the war in Iraq, but that’s a topic for a different post). Thus, despite what they have actually been saying publicly, they say that their true position is more nuanced: government spending cannot create jobs as efficiently as private sector spending.
So, let’s look at the numbers. According to a study conducted in 2009 by economists Robert Pollin and Heidi Garrett-Peltier, we could expect the following amount of job creation from 1 billion dollars of spending in these four categories:
Education: 29,100 jobs
Health Care: 19,6000 jobs
Clean Energy: 17,100 jobs
Military: 11,600 jobs
This study, and the countless others that reveal exactly the same thing, leads to two really interesting conclusions.
1. When Republicans criticize the stimulus package for not creating jobs or, as they did last week, filibuster a bill that could create a million jobs through a tiny tax increase on millionaires, they are making an argument that they themselves clearly don’t even believe.
2. If Republicans are serious about not wanting to cut military spending because of job loss, then they should be even more supportive of increased spending on sectors that are significantly more efficient at creating jobs. In other words, if Republicans were truly honest about their interest in job creation, they would support increased taxes on the wealthy to fund education, health care, and clean energy. Unfortunately, I don’t think we’ll see a Republican endorsement of Occupy Wall Street any time soon.
-Zack
7 Notes/ Hide
- tableit-blog liked this
- nickthejam liked this
- passtherelish posted this