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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

You Can’t Create Jobs With Spending Cuts

At first glance, this response to Senate Democratic offers to kill several billion dollars in earmarks seems bland and formulaic:

“It sounds like Senate Democrats are making progress towards our goal of cutting government spending to help the private sector create jobs,” said Michael Steel, spokesman for House Speaker John A. Boehner (R-Ohio). “Hopefully, that means they will support the [bill] with spending cuts that we will pass next week, rather than shutting down the government.”

But stare at that first sentence for a minute, and ask yourself when, if ever, Republicans have made any sort of case that “cutting government spending” will “help the private sector create jobs.”
The government spending cuts at the state and local level that have been underway for two years now certainly haven’t done anything to “help the private sector create jobs.” Indeed, a new Commerce Department report suggests that state and local spending cuts had a lot to do with lowering GDP growth in the fourth quarter of 2010 from a projected 3.2 percent to 2.8 percent.
But what’s remarkable is that the “spending cuts equal jobs” claims of Republicans rarely involve any sort of coherent argument for this counter-intuitive assertion. Yes, there is a point at which public debt could get to levels that boost interest rates and thus dry up capital for private-sector investment. But that’s not happening at all right now. Maybe some government regulations add to business costs (often for very good reasons, if you value the environment, safe food, or safe working conditions, or fear another financial meltdown), but Republicans have made no effort at all to correlate its budget cut proposals with specific examples of alleged excessive regulation. Occasionally you hear conservatives suggest that the entire social safety net, and particularly unemployment compensation, has somehow made it impossible for employers to find anyone to fill job openings. But no serious person believes, particularly at a time of 9% employment, that the private sector is suffering from a labor shortage.
Democrats need to challenge the “spending cuts equal jobs” nonsense whenever it appears. If the Republican agenda is actually to cut spending on programs it doesn’t like for various ideological reasons (e.g., family planning), or to reduce government as an end in itself, then its advocates should be forced to say so, instead of pretending they are pursuing some sort of strategy for economic recovery, jobs or long-term growth. As New York Times economic columnist David Leonhardt explained the other day, that cuts against everything we know about recessions.

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