Saturday, April 9, 2011

Question


According to Economic Policy Institute (as posted by PBM?), proposed GOP cut of $61 billion would have caused 600,000 job losses. Will the bipartisan $39 billion cut cause 384,000 job losses or will this cut work differently because of composition of cuts?

10 comments:

Patrick_L said...

the composition matters heavily. There's limited information right now about the specific composition of the cuts (and I don't know a ton about every government program), but I do know that these specific CHIMPS (others would have an impact) have minimal, if any impact, on the economy.

TJE said...

http://www.businessinsider.com/the-washington-post-aka-fox-on-15th-has-not-heard-about-the-recession-2011-4

TJE said...

450,000?

http://newwnypolitics.net/index.php?option=com_content&view=article&id=1927:predicts-budget-agreement-will-cost-450000-jobs&catid=1

TJE said...

http://news.firedoglake.com/2011/04/09/the-ugly-the-ugly-and-the-ugly-a-look-at-the-2011-funding-deal/

Patrick_L said...

Once again, with only limited details about the specific cuts: 75,000 to 150,000 seems like a more reasonable estimate (based off previous Fed estimates and established CBO multipliers).

TJE said...

Mr. L, your peeps don't seem to be getting the message:

http://tpmcafe.talkingpointsmemo.com/2011/04/10/budget_resolution_will_the_450000_newly_unemployed/

Patrick_L said...

Sigh. We've already discussed how these estimates work. 450,000 doesn't take into account the fact that many of these cuts are CHIMPS. Taking that into account, 300,000 jobs lost would represent a high-end, but still possible, estimation of how many jobs will be lost as a result of the deal. The most likely range of job losses is smaller. Many liberals are just pointing out that this deal isn't an actual win- Obama just has to sell it as a win because if he doesn’t, then House Republicans will get all the credit and political capital. The Administration is well aware of the substantial job losses that will occur as a result of this deal and its impact on aggregate demand- politics is just forcing them to ignore the economic reality.

Senate Democrats and the Administration need to maximize their store of political capital for fighting off the Republicans attempts in the future at "deficit-reduction," even though Ryan's plan essentially offsets all of his spending cuts with tax cuts resulting in almost no deficit reduction for the first decade. After that, Ryan only achieves significant deficit reduction from changes to Medicare that conservative pundits, including people from National Review that you are so fond of citing, have already panned as politically impossible. All Ryan does with Medicare is shift costs to the future elderly so that for the vast majority of Medicare beneficiaries, their contribution to their health care costs will quickly consume the majority of their income. In the process Ryan increases health care costs by shifting people out of the cost-efficient Medicare program. Conservative economists have also pointed out that Ryan's plan does nothing to control health care costs for the nation- which seems pretty stupid considering that if the U.S. had similar health care costs as other developed nations, we'd actually be running surpluses.

But Paul Ryan, the conservative media outlets, and mainstream media figures desperate to find some conservative figure who seems sane- will fail to point out the massive flaws and falsehoods in Ryan's proposal. This means that Obama and Senate Democrats will be forced to negotiate with someone who clearly is unconcerned with the problem most economists are concerned about- the size of the national debt relative to our economy. All Ryan and Republicans want to do is cut spending programs that benefit low-income Americans to finance tax cuts for the rich. This is who Democrats are forced to negotiate with while attempting to actually address our nation's problems. Democrats must hold their noses on this deal in order to put themselves in a better position for stopping Ryan’s plan to reduce the progressivity of the tax system, reduce the progressivity of government programs by taking an axe to those that serve low-income Americans, and as a result do virtually nothing for deficit reduction. It’s sad that this is the best they can come up with- the most “serious” and “brave” we can expect most Republicans to be. (Thank goodness for those Republican in the Senate actually interested in solving our nation’s problems. The contrast between them and “brave,” “serious,” Paul Ryan is quite sharp, and is the only thing giving me hope that there are any Republicans out there actually interested in addressing our nation’s problems.)

TJE said...

http://twentycentparadigms.blogspot.com/2011/04/macroeconomic-impact-of-budget-deal.html

Patrick_L said...

Uhm… Wait- are you a Keynesian now? Whew- I’m glad you’ve finally decided to reject crazy Cato economics that argues “non-Keynesian” effects would somehow allow significant fiscal contraction to actually be good for the economy (in contrast to the U.K.’s current example).

TJE said...

Fair and balanced, Mr. L, fair and balanced.