In the long run, government cuts won’t kill too many jobs. However, when looking at month-to-month changes, the connection is strong in a negative way, according to an article by Bloomberg.
If annual government spending was decreased by $50 billion, there would 400,000 fewer jobs, according to the article. That sounds like a serious number of lost jobs. But Edward Glaeser, a Harvard economics professor and author of the Bloomberg article, said it can be made up by private-sector job creation.Comment on this story
Annually, 1.9 million jobs are created a year, he says. If this remains the same, it could make up for potential government job losses in less than three months.
“It is time to start thinking beyond the present, and embrace the spending cuts that will mean a smaller debt burden for our children,” Glaeser said in his article.
When the government spends more, it hurts the economy, according to a recent article by the National Bureau of Economic Research. Reversely, cuts in public spending create faster growth and can create more private investment.