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Tuesday, June 21, 2011

The GOP Myth of 'Job-Killing' Spending

Alan Blinder is worried:

The GOP Myth of 'Job-Killing' Spending, by Alan Blinder, Commentary, WSJ: ...I'm worried about the damage that might be done by one particularly wrong-headed idea: the notion that ... government spending destroys jobs.
No, that's not a typo. House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." ... Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now.
Acting on such a belief would imperil a still-shaky economy that is not generating nearly enough jobs. So let's ask: How, exactly, could more government spending "kill jobs"? ...
The generic conservative view that government is "too big" in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them? ...
Despite ... evidence and logic, some people still claim that fiscal stimulus won't create jobs. Spending cuts, they insist, are the route to higher employment. And ideas have consequences. One possibly frightening consequence is that our limping economy might have one of its two crutches—fiscal policy—kicked out from under it in an orgy of premature expenditure cutting. Given the current jobs emergency, that would be tragic. ...

    Posted by on Tuesday, June 21, 2011 at 12:24 AM in Economics, Fiscal Policy, Politics | Permalink  Comments (90)


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