Spending cuts in the real world

Budget cuts at the sub-national level led to hundreds of thousands of lost jobs in the state

Topics: Jared Bernstein, U.S. Economy, spending, Republicans, Taxes, Washington, Government, ,

This originally appeared on Jared Bernstein's blog, On the Economy.

The factoid I think I’ve been touting the most in cable TV arguments lately is that when it comes to spending cuts, we’ve already cut government spending by $1.5 trillion over ten years ($1.7 with interest savings) by lowering discretionary spending caps.

Yet, Republicans—and too many moderators—deny that these cuts occurred.  Just yesterday, Ezra quotesPaul Ryan as saying the cuts don’t count because they came out of “the last session” of Congress, though as Ez points out, so did the tax increases.  So if they really want to start at zero…

Obviously, this is all more posturing and understandable, I guess, in a negotiating framework where you signal intransigence to your opponent.  But the cuts are real and they’re showing up in the economy, as per this AM’s WaPo re the defense contractor General Dynamics:

One of the nation’s largest federal contractors reported a $2 billion loss Wednesday and blamed it on defense cuts, a sign that the government spending that provided the rocket fuel for the metro area’s decade-long economic expansion is now dissipating.

The figure below shows that the loss was came out of their IT production.

Information technology appears to be one of the first segments of the private sector to sustain tangible damage from federal budget cuts — because it’s easier for the government to stop rewiring offices than it is to stop building a ship or a tank.



Let me be clear: I’m not criticizing the cuts, though I would have backloaded them, in terms of the timing, so as not to hurt the recovery.   Nor am I saying that this one example is indicative of a broader pattern, though I suspect it is.  In fact, we already know that budget cuts at the sub-national level led to hundreds of thousands of lost jobs in the state and local governments.

My point here is that members of Congress who claim that no spending cuts have occurred need to talk to the people and firms who are dealing with them, be they defense contractors or families whose kids can’t find a Head Start slot.

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden. Follow his work via Twitter at @econjared and @centeronbudget.

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott and the friends with whom he recorded in middle school in Texas (photo courtesy of Dan Pickering)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Heatmiser publicity shot (L-R: Tony Lash, Brandt Peterson, Neil Gust, Elliott Smith) (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott and JJ Gonson (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    "Stray" 7-inch, Cavity Search Records (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott's Hampshire College ID photo, 1987

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott with "Le Domino," the guitar he used on "Roman Candle" (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Full "Roman Candle" record cover (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott goofing off in Portland (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Heatmiser (L-R: Elliott Smith, Neil Gust, Tony Lash, Brandt Peterson)(courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    The Greenhouse Sleeve -- Cassette sleeve from Murder of Crows release, 1988, with first appearance of Condor Avenue (photo courtesy of Glynnis Fawkes)

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>