The Spectacle Blog

What Government Budget Cuts?

By on 8.15.12 | 10:32AM

On Saturday, Washington Post blogger Suzy Khimm wrote about "draconian budget cuts" in state and local governments "throughout the recession." Unfortunately, Khimm’s analysis is wrong in several ways, which is pretty impressive considering how short the post is.

First, there haven’t been budget cuts at the state and local level over the last several years. I wrote about this to refute Paul Krugman a while back, but the facts bear repeating:

First and foremost, local and state government spending hasn’t gone down since the recession started. The linked chart does show that government spending went down in from 2009 to 2011 as a percentage of Gross Domestic Product, but in pure numbers (also seen at the link) only 2009 saw a drop, and the spending in 2010 more than matched the 2009 drop.

Second, Khimm claims that government employment has gone down ignores context -- namely, that government employment went up during the recession that officially ended just over three years ago. Such context is provided by an April 2011 Bureau of Labor Statistics analysis of the 2007 to 2009 recession, which says government employment went up 0.8% in that time. Further context is provided by Ed Carson, who pointed out the following in Investor’s Business Daily:

Private-sector jobs are still down by 4.6 million, or 4%, from January 2008, when overall employment peaked. Meanwhile government jobs are down just 407,000, or 1.8%. Federal employment actually is 225,000 jobs above its January 2008 level, an 11.4% increase. That’s right, up 11.4%.

Private payrolls have been trending higher in the last couple of years while government has been shedding staff. But that’s because governments did not cut jobs right away. Overall government employment didn’t peak until April 2009, 16 months after the recession started. It didn’t fall below their January 2008 level until September 2010.

The recession was boomtime for federal employment, especially after Obama took office. Federal jobs kept rising (excluding a temporary Census surge in early 2010) until March 2011 — more than three years after overall payrolls peaked.

Lastly, Khimm cites a Bloomberg chart showing government employment as a share of the civilian population has gone down in the last several years. However, BLS data for July shows that while the unemployment rate for all workers is 8.6% (clearly, this particular data set differs from the popular unemployment data the BLS publishes on the first Friday of each month), the unemployment rate among government workers is 5.7%, and has gone down by nearly a percentage point since July 2011.

Khimm writes for the Post’s Wonk Blog, which prides itself on solid, substantive analysis of issues important to public policy. While the blog has a decidedly liberal slant, I often find it a useful read for my own knowledge of both issues and how liberal writers think. Unfortunately, Khimm’s piece relies heavily on misdirection for its argument, and thus discredits both its argument and the organization for which she writes.

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