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Employment shrinks as government grows (11/15/2009)
By John Edstrom


     
Numbers on the federal deficit, dismal and scary ones, hit the streets on Friday. For fiscal year 2009, ended Sept. 30, the federal budget ran $1.42 trillion in the red, a record $942 billion over last year’s record, a piddling $478 billion. It is hard to put such sums into any kind of perspective, but the $1.42 trillion is 9.9% of last year’s gross domestic product. The Obama administration anticipates a deficit for 2010 of $1.5 trillion, a prediction sure to be low.

The U.S. government is borrowing, or printing this money depending on how you look at it. In any case, it will have to be paid back by the private sector, mainly from taxes on corporate profit or individual income. Of course, we remain in a recession with 10.2% unemployment as of October.

The $787 billion dollar stimulus package rammed through Congress earlier this year, a huge and ongoing contributor to the deficit, was supposed to have kept unemployment down somewhere around 8% by “saving or creating” a myriad of jobs.

We are beginning to find out about that. According to the Minneapolis Tribune last Sunday, the stimulus has saved or created school jobs — 7,421 in K-12 out of a total of 11,582 in all categories, according to Minnesota’s Office of Budget and Management. Of the 7,421 school jobs, 5,800 were saved, while the remaining 1,621 were created new. It is surely comforting for all those in the private sector who have been laid off, or had their hours cut, to know that their brethren who work for the government have been spared similar pain.

However, it is difficult to understand just what the creation of 1,621 new teaching jobs will stimulate here in Minnesota, other than a demand for more tax dollars to sustain them — by then they will be essential — when the stimulus runs out two years hence.

Recent stories in the Milwaukee Journal/Sentinel, (Don’t count on stimulus job tally, 11/5/09), and Boston Globe, (Stimulus job boost in state exaggerated, review finds, 11/11/09), report similar discoveries. In Greenfield, Massachusetts, the Head Start program attributed 90 full-time jobs to $245,000 in stimulus funds which were actually spent on raises for 150 employees. The Milwaukee story lists all sorts of inaccuracies and fantasies in the reporting of stimulus jobs, and cites the contention of Tom Schatz of the national organization, Citizens Against Government Waste, that all the program was doing was preserving government and education jobs.

Meanwhile, the unemployment numbers climb higher and higher as the private sector postpones any rehires, shuddering in anticipation of what this will all cost down the road when the sensible anticipation is not of a bigger economy, but a bigger, more expensive government which was spared any harsh lessons in eliminating waste and operating more efficiently during the recession.

J.E.

 

 

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