Don't Drink the Tea. Think With the WE.
Feb
2012
8

RUH ROH for CUT-GROW: “States that cut the most spending have lost the most jobs.”



The Cut-Grow economic model that Republicans (and some Democrats) have been touting as the philosophy to end our nation’s economic woes has finally produced results. The only problem is the results are further proof that the philosophy is flawed. Think Progress recently posted these results after investigating how Cut-Grow has effected the states whose leaders have pushed for dramatic spending cuts. TP found that the states that cut the most spending have lost the most jobs:

Speaker of the House John Boehner (R-OH) is an ardent follower of this Cut-Grow cult, as are a number of high profile governors. For instance, Gov. John Kasich (R-OH) declared, “We’re going to have to reduce spending…to create a platform for economic growth.” When Gov. Chris Christie (R-NJ) delivered his budget to the state Legislature he argued, “We must continue to cut government spending” to create jobs and prosperity for New Jersey families. Gov. Scott Walker (R-WI) vowed his budget “lays [the] foundation to create jobs.”

Now these Republicans want the American public to drink a giant glass of their Cut-Grow Kool-Aid. But the data actually show the opposite of their claims to be true: steep spending cuts are hampering economic recovery in some states, while other states that resisted cuts or increased spending are now seeing declining unemployment rates, faster private-sector job creation, and stronger economic growth.

Between December 2007 (the beginning of the great recession) and the end of 2010, 24 states cut government spending by an average of 7.5 percent while 24 have expanded spending by an average of 11 percent. These two groups have witnessed gravely different results, with those spending more having more success than those who prescribed Cut-Grow:

Relative to national economic trends, states that increased spending enjoyed on average:

0.2 percentage point decrease in the unemployment rate

1.4 percent increase in private employment

0.5 percent real economic growth since the start of the recession

In contrast, states that cut spending saw on average

1 percentage point increase in the unemployment rate

2.1 percent loss of private employment

2.9 percent real economic contraction relative to the national economic trend

Clearly, the numbers do the talking. Read the entire TP “charticle” and say a prayer (hand over pocketbook) for the 2012 Congressional election.

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