How Government Budget Cuts Significantly Reduced U.S. GDP Last Year

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http://thinkprogress.org/economy/2012/01/30/414242/government-budget-cut-gdp/

The Commerce Department reported last week that the economy grew at a 2.8 percent rate in the fourth quarter of 2011, higher than GDP growth has been recently, but still not enough to significantly bring down unemployment. And as the New York Times’ David Leonhardt explained, one of the major drags on growth has been the budget-cutting that has been going on at all levels of government for the past year and a half:

The public sector has been shrinking for the last year and a half — mostly because of cuts in state and local government, with some federal cuts, especially to the military, playing a role as well. In the fourth quarter, government shrank at an annual rate of 4.5 percent.

Over the last two years, the private sector grew at an average annual rate of 3.2 percent, while the government shrank at an annual rate of 1.4 percent.

The combined result has been economic growth of 2.3 percent.

“The obvious conclusion seems to be that economic growth, and employment growth, would have been significantly stronger over the last two years without government cuts,” Leonhardt noted.

Of course, Republicans in Congress have been staunchly opposed to helping states weather the nation’s continuing economic storm, forcing them to resort to layoffs that not only hurt the economy, but leave communities worse off, with fewer teachers, firefighters, and police officers. (Some teachers in Pennsylvania have decided to work without pay, while one school district in that same state decided to use sheep to cut its grass in order to minimize costs.) More than half a million public sector workers have lost their jobs in the Great Recession.

[surfdog]

1. Same thing happened in 37

The nation was recovering from the great depression until massive government cutting led to the recession of 37

Now of course some of you will tell me that we were in a depression until 1940 but ask yourself how could we slip into a recession in 1937 if we were in a depression

[RC]

2. We need Living-Wage-Jobs for the economy to function.

It matters very little whether those jobs are public or private sector jobs. The net effect will be the exact same. Money circulating in the economy. There can be no recovery without money circulating in the economy. Bailing out he the big money boys in counter productive, they caused our problems. Do something to bail out main street, instead.
A healthy Main Street is what powers the economy. Not the people on Wall Street, not the people running big banks. It is people like you and me, not with "just jobs", but with Living-Wage-Jobs that support the economy. We had that once during my life time, we can do it again.