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Edward Glaeser

Spending cuts won’t kill too many jobs

There is something of a consensus that federal dollars do more to affect jobs during the depths of a recession, which is why the recovery makes it easier for us to contemplate spending cuts. If we start with Wilson’s $125,000-per-job number seriously, this means that reducing annual government spending by $125 billion would mean somewhat less than one million fewer jobs, at least in the short run. That is a considerable figure and probably more than the U.S. would feel comfortable losing right now.

If we cut only $50 billion, this should mean 400,000 fewer jobs, and possibly less if the effect of public spending on employment is weaker today than it was during the recession. That’s a serious loss, but if private-sector job creation continues at its current annual rate of 1.9 million a year, private-sector growth could offset that loss in less than three months.

The data hold out hope. It is time to start thinking beyond the present, and embrace the spending cuts that will mean a smaller debt burden for our children.

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Cutting entitlements may affect federal jobs, and we have way too many of those anyway.

Start cutting.

darwin on January 10, 2013 at 2:25 PM

Greaaaaaaaaat … more static — Stage-1 thinking — analysis from a Harvard professor of economics.

Did it ever occur to him that while cutting spending may eliminate jobs in the public sector, it could actually make up for that and far more owing to creation in the private sector? Of course not …

The morons never gave a crap about the effect on private sector jobs of exponentially increasing government spending over the past century, but now are very sensitive to the reverse? I call BS …

ShainS on January 10, 2013 at 2:31 PM

No, I think that’s kinda the point. Budget “surpluses” for federal agencies results in adding unnecessary jobs to justify the budgets.

CUT USELESS FEDERAL JOBS. CUT HERE, CUT THERE, CUT NOW.

Jeddite on January 10, 2013 at 2:31 PM

Imagine if those 1,000,000 people started producing goods and services the nation wants and needs.

Here’s holding out hope that their time spent in civil service hasn’t rendered them useless for anything else. Though we should be realistic about the chances for, say, Dept of Education employees. They’re probably only potentially beneficial to society as chum at this point.

TexasDan on January 10, 2013 at 2:39 PM

In a free economy, transactions do not take place unless both parties are pleased with the result — leading to a general increase in satisfaction as each transaction occurs.

Government transactions, by contrast, involve coercion. It is entirely possible — even likely — that the general well-being will be decreased by each transaction. Much of what the government does with tax money is worth less to the economy than doing nothing at all — e.g. meddling EPA bureaucrats, the voting-rights posse at DoJ.

While spending cuts at the EPA or DoJ would directly impact the individuals involved, they would greatly contribute to the general welfare.

cthulhu on January 10, 2013 at 2:42 PM

Considering that $6 trillion in deficit spending didn’t produce jobs, I’m inclined to believe cutting spending would have a similar nil effect.

theperfecteconomist on January 10, 2013 at 2:57 PM