There are no free lunches. If you cut spending on teachers today – you have horrible students and thus an uneducated workforce in the future. And that creates a loss in economic growth, prosperity and opportunity. Anyone could gut the budget today and make it balanced. You could do that at home. Most people have a car note – well… they could just give it to the bank. Problem solved – that’s $300 or $400 or maybe $800 a month that a person saves. Now how the hell are you going to get to work? Saving money doesn’t always save you money. It’s true at home and it’s true as it relates to government spending and the economy.
We’re living under a conservative recovery. Low taxes, smaller government …
The Hamilton Project writes HERE:
To examine the direct consequences of lower government employment, consider the case in which employment had hewed to its historical level. Between 2001 and 2007, the average ratio of government employment to population was 9.7 percent. Had that share remained steady, government employment would have been more than 23.6 million in June 2012 as compared to its actual level of 21.9 million. That is, employment would be 1.7 million jobs higher today if the share had remained constant, and the unemployment rate would be 7.1 percent instead of the current rate of 8.2 percent (see graph below).
Of course, an important test for the efficiency of government spending is whether the benefits exceed the costs. The savings from these cuts, in terms of teacher salaries and benefits, are $11.8 billion per year nationwide. While a significant figure, it is substantially smaller than the estimated present value in foregone earnings of $49.3 billion dollars for the children, whose education is affected by larger class sizes. To put a fine point on these findings, this translates into a per-student, per-year loss of nearly $1,000 in future earnings. In summary, the foregone benefits are more than four times larger than the current budget savings!
This study is consistent with other studies – one that we’ve written about HERE; government payrolls are down… smaller government in action:
And as we’ve written about HERE – the Republican Congress fetish with reducing the size of government is killing our economic recovery; this chart below compares the public sector workforce versus the two most recent recessions:
And consistent with the Hamilton Project’s study … unemployment would be near 7% if government sector employment grew at the rate as under either Bush or Reagan. You can find that HERE. And another one like that HERE.
And as we’ve written about HERE – government spending is at it’s lowest rate in nearly 60 years as rated “Mostly True” by Politifact.
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