Editorial: Lifeline from Uncle Sam
Besides reporting anemic job creation in the private sector, last last week's monthly federal jobs report noted another drag on the economy: the loss of thousands of jobs in the public sector. State and local governments cut 48,000 jobs in July, more than 100,000 in the last three months.
When a factory lays off workers, we can surmise that reduced demand made those jobs unnecessary. But the recession doesn't mean we need fewer teachers, police, DPW workers and social workers. It just means that the recession has so dampened government tax revenues that we cannot afford them.
As a result, states and communities across the country are slashing government services. Public school students in Hawaii now only go to school four days a week. Courts are being closed in New Hampshire and Massachusetts. Cities and towns are turning off their streetlights. Out west, some counties are reducing paved roads to gravel because they can't afford to maintain them.
At some point, reasonable belt-tightening crosses a line and becomes active disinvestment. While the short-term impact is unfortunate, especially for those losing jobs, the long-term effect on the economy should trouble everyone. Business and political leaders around the world understand that education and infrastructure are the keys to economic competitiveness. What does it say about America that our states and municipalities are so willing to see our schools get worse and our infrastructure crumble?
These cuts make little short-term sense either. Amid all the calls for cutting government spending, a question must be asked: How does laying off thousands of people make the economy stronger? State and local employees suddenly out of work won't be shopping in local stores, making their house payments or investing in local businesses. Every jobless person is a drag on the economy, so why do some on the political right take such pleasure in these cuts?
In this context, the $26 billion in aid to states approved this week by Congress is especially welcome, though it will barely make a dent in the budget woes of states and municipalities.
Congress did something Washington Republicans seem not to understand: Paying for new programs by finding the money elsewhere. This bill is funded by raising taxes on a relatively small class of multi-national corporations, which conservatives don't like, and by postponing a $12 billion increase in food stamp allotments, which liberals don't like. It's the kind of priority-setting legislators are supposed to do.
Not only will this spending not increase the deficit, the nonpartisan Congressional Budget Office says it will reduce the deficit by $1.4 billion over 10 years.
So this bill saves jobs, staves off educational decline, protects government services and reduces the deficit. That so many people think it's still a bad idea boggles the mind.
MetroWest Daily News