Without GOP, Unemployment Would Be under Six Percent
The GOP has been on an economic wrecking mission ever since the election of Barack Obama – indeed we now know that leading Republican strategists and legislators met and planned a course of economic sabotage and complete obstruction on Obama’s very first day in office.
By Blue Mark
This obstruction has had a huge price – a deliberate price that the GOP is betting the American people will blame on President Obama. GOP obstruction did not prevent the passage of ARRA – the American Recovery and Reinvestment Act – popularly know as “The Stimulus” bill of 2009 during the height of the economic disaster as the economy was falling off a cliff – the non-partisan Congressional Budget Office estimates that ARRA has saved up to 3 million jobs. But nearly every economic measure since then has been blocked by GOP obstruction, filibusters and brinksmanship.
What has been the result of GOP obstruction?
It is hard to quantify what constant obstruction has cost – you could tally up estimates of every measure that came along, but not all would have passed – nor even been introduced if previous measures had been adopted that obviated their need. But we can look at just two big examples and get a minimal measure of the human cost to American citizens of a deliberate policy to destroy the economy in order to bring down the president; 1) austerity, and 2) obstruction of the 2011 American Jobs Act. Taking just those into account, the unemployment rate would be under 6% were it not for deliberate GOP wrecking.
Austerity is madness – many in the GOP actually believe that austerity during an economic downturn is the right thing to do – even ‘socialist’ Europe was convinced of this – although most realize it is not true, and has no history of success – even Mitt Romney unwittingly admitted as much in an unguarded moment. But that hasn’t stopped savage austerity on the state and local level – which has cost over 600,000 public sector jobs so far.
Normally in a recession and recovery government at all levels increase public employment – this has happened in every GOP administration – and much of that increase is funded by federal government grants to the state and local governments. But since the Stimulus, the GOP has blocked any substantial help for the states, and in GOP led states severe austerity cuts have been the rule – even including GOP governors rejecting projects fully funded by the federal government. The economic cost of this is far more than just those 600 thousand jobs – the spillover effect on private business and local economies has been devastating – when you factor in all these effects the total job cost of austerity has been estimated at 2.3 million jobs.
President Obama proposed the American Jobs Act in his 2011 State of the Union address, and spent the next year promoting it at every opportunity. Although expensive – it contained a combination of targeted tax cuts and some tax increases, along with direct spending designed to increase consumer spending and lower the cost to business of hiring new workers, all while paying for the bill. The CBO said the bill would not only have paid for itself within 10 years, but would have reduced the deficit by at least 6 billion dollars. According to an analysis by Moody’s it would have created about 1.9 million jobs.
The result of GOP obstruction with those two things cost us 2.3 million jobs and 1.9 million jobs respectively. US employment as of May 2011 is about 155 million jobs, which means those 4.2 million jobs that the GOP has prevented account for 2.7% of the unemployment rate. But let’s be fair, there is a small amount of overlap in those jobs – a small portion (about 8%) of the American Jobs Act would have gone to State and Local governments to pay for teachers, first responders and the like – although for the most part it would have just prevented further layoffs rather than resulted in new hires. It is also very likely that without the economic wrecking of GOP obstructionism the labor participation rate would be higher – so instead of a reduction of unemployment to 5.5% it would be slightly higher, but still well under 6%.
Now just for fun, consider if we had done during this recovery what every GOP administration has done, and substantially increased public sector employment.
Without knowing how much we would have increased public sector employment we can’t make a firm estimate of how much better employment levels would be, but if we make the assumption that we increased the public sector by just half of the amount we actually reduced it – the total effect on the economy in both public and private sector jobs would be around 1.15 million – which would push the unemployment rate below 5%.
That is the human cost of GOP economic obstruction.
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Posted by Editor on Jul 10 2012, With 0 Reads, Filed under Big Business, Corruption, Editors' Picks, Government, Investing & Finance, Jobs, Politico, Small Business. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.