The defining feature of Republican economic policy for the short-term is immediate austerity-big spending cuts to social programs, coupled with tax increases on lower-income people, and a reduction in the size of the federal workforce. Conservatives claim that this will lead to immediate job growth and a more robust recovery.
The problem, of course, is that all available evidence points to the opposite. In Europe, austerity has renewed the economic crisis-the United Kingdom, for example, is growing at a rate slower than it saw during the Great Depression. At home, austerity at the state and local level-by way of balanced budget requirements-has led to the loss of hundreds of thousands of jobs, and a significantly weaker economy. Writing for the Washington Post, Zachary A. Goldfarb gives the details:
Since the beginning of his term, state and local governments have shed 611,000 employees - including 196,000 educators - according to government statistics. Unlike the recovery in private-sector employment that Obama and his reelection campaign often cite - with businesses adding 4 million jobs since hiring hit its low point in 2010 - the jobs crisis at the state and local level has continued throughout his term. […]
"There's a big body of research showing that a lot of the things that state and local governments spend their money on have long-term effects on the economy and society as a whole," said Nicholas Johnson, vice president for state fiscal policy at CBPP. "Cutting school funding now can hurt the education of a future workforce."
As Goldfarb describes, the administration knew that state fiscal relief was one of the best measures to keep the economy on track for growth, but the categorical obstruction of Republicans in Congress-and the skepticism of conservative Democrats-led them to go in other, more politically feasible directions.
The least you can say is that this was disasterous; if states and localities had the funds to keep all, or most, of the jobs they've shed over the last three years, the economy would be in much better shape, and the recovery would be on a stronger path. But this is one of those areas where the administration didn't have much control; given the extent to which Republicans have rejected friendly compromises over the last year, there was no chance that they would accept tens of billions in new relief for states.
Mass layoffs for teachers, police officers, and other public servants-this is the inevitable consequence of GOP budget cutting, should Mitt Romney win the election. Someone should ask the former Massachusetts governor how he intends to "fix the economy" with his coked-out version of European austerity.
