We Tried Austerity, and it Didn't Work

From the beginning of President Obama's term, Republicans have attacked him for "growing the size of government" and creating a false recovery with higher spending. but it's hard to see what they're talking about. Yes, there's the Affordable Care Act and Dodd-Frank. At the same time, however, the United States has seen a record decline in the number of public workers—since the official end of the recession, state and local governments (as well as the federal government) have laid off hundreds of thousands of workers.

In criticizing the administration, conservatives say they want steady cuts to the public sector, offset by private sector growth, and that's exactly what we've seen for the last three years. The results, unfortunately, have not been good. Here's The Wall Street Journal with more:

Federal, state and local governments have shed nearly 750,000 jobs since June 2009, according to the Labor Department‘s establishment survey of employers. […]

A separate tally of job losses looks even worse. According to the household survey, which is where the unemployment rate comes from, there are nearly 950,000 fewer people employed by the government than there were when the recovery started in mid-2009. If none of those people were counted as unemployed, the jobless rate would be 7.1%, compared with the 7.7% rate reported on Friday.

Here's a chart that illustrates the point:



Shrinking the public workforce has done nothing but exacerbate our economic problems, and increase the odds that our cyclical joblessness—caused by the Great Recession—will harden into persistent, structural unemployment. In a sane country, we'd be arguing over ways to inject money in the economy, generate demand, and create jobs. As it stands, we're fighting an epic political battle over the best way to implement austerity.


The austerity agenda must have worked. We imposed it on the post-middle class/poor, and it brought an end to poverty. We know this because, after all, even progressives aren't talking about US poverty. The worse off an American can be is "working poor," which provides an income roughly double what our former welfare benefits provided. Since we were told that welfare provided very generous benefits, enabling recipients to buy those big screen TVs, etc., the working poor aren't poor at all. We evidently enjoy full employment. There must be an abundance of jobs because who so harshly punish those who "choose the poverty lifestyle." Now, if the austerity agenda has worked so well for the poor, imagine how much better it will work for the middle class!

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