October 12, 2011

Spending Cuts Don’t Have to Mean Fewer Jobs

Arnold Kling

Senior Affiliated Scholar

Many of the concerns about cuts to federal spending have revolved around fears of deepening an already severe employment crisis.

You do not need to eliminate government jobs, you can instead cut salaries. There might be some government jobs that you could eliminate that would help the rest of the economy, particularly jobs that involve rigging the housing market or trying to rig the energy market. But those are relatively few in number.

Reduce pay for federal workers, and encourage state and local governments to do the same for their workers. This will allow scarce tax revenue to go farther, in terms of employment and services.

The problem is that we’ve reached a point where the government simply can’t deliver what it’s promised and has to cut something.

Relative to the promises that are embedded in a totally unrealistic budget, somebody is going to get hurt, because the promises do not add up. It's not warfare against the middle class, it's math.

Read more of Arnold Kling’s comments on the subject at his blog EconLog.org