SALON

Thursday, Jan 24, 2013 10:23 PM UTC

Spending cuts in the real world

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

By

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

Spending cuts in the real world (Credit: FotograFFF via Shutterstock)
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

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. More Jared Bernstein.

Next Article

You Might Also Like

More Related Stories

Featured Slide Shows

Gripping photos: The people of the Turkey protests (slideshow)

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

  • Recent Slide Shows

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

Related Videos

More Related Stories

Comments

 4 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>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "We Are All Completely Beside Ourselves": Growing up primate

Recommendations