re: #318 drcordell

Sattv and NDhockey, you seem to be vehemently opposed to the stimulus. Yet I haven’t actually seen you produce any concrete evidence of its ineffectiveness. And no, pointing out that unemployment is 10% doesn’t count, since real economists nearly all agree that without the stimulus we would easily be up at 15% or higher.

If you had your way and the stimulus was not enacted, how would you have filled the budget deficits in nearly every state? What money would those states be using to make sure that their teachers, fireman and policemen are still able to have jobs? And through what mechanism would you have helped prevent unemployment from sliding past 10% to 15%?

What evidence do you have of any states actually taking steps to cut spending on their own. NJ raised its spending. NY raised its spending and used overly optimistic revenue projections - increasing their deficits in the process. Rinse and repeat across the nation. Their spending was out of control and these states used the stimulus funds to paper over their spending and revenue deficits - a situation that will not be repeated in this upcoming fiscal year.

That means that all the states that ignored their dire fiscal problems and pushed them off one year are now doubling down on their deficits. Some are hoping for another bailout from the feds. Or they’re looking to raise taxes.

Spending cuts? They’re barely on the table. In NJ, Christie proposed a spending freeze that would have required localities to tap into their reserve funds to finish out the current fiscal year, and that’s being called a massive cut in education spending by Democrats and the unions even though the schools have the money to finish out the fiscal year.

Some states, like CO have engaged in furloughs of state workers. UT went to a 4-day workweek for state workers in nonessential agencies to save money. It appears to have worked in those states (longer workday, means same hours are put in, but lower costs for operation due to a 3-day weekend). Furlough days means additional savings for longer weekend.

In the vast majority of cases, the fire, police and teachers jobs were never going to be touched by any spending cuts. They’re always touted as being on the line - but anyone who watches the budget process knows that never happens. Those unions are simply too strong and have too much hold and sway to let their members hang out to dry. It always ends up being a strawman argument on behalf of the politicians who oppose cuts in state spending of any kind.

As for the unemployment rates - there’s quite a bit of games played by the BLS in terms of how they calculate the rates - the U3 (which is around 10%) and the U6 (which is 16-17% or more). If they cut the size of the workforce, it makes the rate look that much better, even if the economy keeps shedding jobs. That’s how you can get a stable or declining rate at a time when job loss increased (as was the case in the past couple of months).