Quantcast

Government spending cuts won't kill job rates in the long run

Published: Thursday, Jan. 10 2013 12:30 p.m. MST

In this 2012 photo, a person fills out an application at the Fort Lauderdale Career Fair, in Dania Beach, Fla. An author on Bloomberg claims that government spending cuts won't hurt job rates in the long term.

J Pat Carter, AP

Enlarge photo»

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.

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.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS