Politicians love to brag about cutting government work forces. This month, while the private sector added 57,000 jobs, government shed 39,000 jobs, for total job growth of 18,000, which is basically not different from zero statistically.
Cutting government jobs not only has consumption effects (people who don't get paychecks can't buy stuff), it also has productivity effects. When the DMV is closed three days a month, people have to wait longer to get their drivers' licenses. When there are fewer cops, crime increases. When there are fewer high school teachers, the ability to offer AP courses drops, etc.
Is there waste in the public sector? Sure. But for those working in the private sector, particularly large institutions, ask yourself whether everyone you work with is productive. I have no idea what the "correct" level of public sector employment is. I also have no idea how much public sector employment crowds out the private sector, but if the crowding out effect is less than one (and with unemployment above nine percent, I am guessing the effect must be less than one), then reducing government employment reduces total employment. But to think that cutting government employment is a magic pill for economic recovery makes no sense.
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