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September 5, 2011

Distracting From the Unemployment Crisis

Railing about deficits in the short term while virtually ignoring the unemployment crisis has resulted in mass unemployment that is devastating not just families, but communities and, in many ways, our country, as Paul Krugman points out — again — in today’s New York Times. 

But another point much less often made is as important:

“Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.  And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.”

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