The Wall Street Journal Thinks Losing 1 Million Jobs Is “Unscary”

Bill Scher

The Wall Street Journal editorial board today is counseling Republicans that the looming across-the-board spending cuts known as the “sequester” are “unscary” and preferable to any compromise that would raise more revenue.

Why should taking a meat ax to the federal government be treated so cavalierly? According to the WSJ, spending is so much higher than it was five years ago, that cutting it back won’t hurt anybody.

In Mr. Obama’s first two years, while private businesses and households were spending less and deleveraging, federal domestic discretionary spending soared by 84% with some agencies doubling and tripling their budgets.

Spending growth has slowed since Republicans took the House in 2011. Still, from 2008-2013 federal discretionary spending has climbed to $1.062 trillion from $933 billion—an increase of 13.9%. Domestic programs grew by 16.6%, much faster than the 11.6% for national security.

This is a clever bit of blurring. What these numbers actually say is public sector spending dramatically increased in “Mr. Obama’s first two years” because the private sector collapsed (something the paper of record from Wall Street might know something about). Because of this, we did not have a global depression.

After those two years the public sector pulled back, but rested at level slightly higher than in the Bush era — an era, by the way, which the Wall Street Journal itself characterized as having the “worst track record for job creation since the government began keeping records.”

So it’s not cutting even more in order to get closer to 2008 levels of spending is a guaranteed return to the glory days.

Then, the WSJ complains about Hurricane Sandy relief:

…this doesn’t include the recent Hurricane Sandy relief bill. Less than half of that $59 billion is going to storm victims while the rest is a spending end-run around the normal appropriations process. Add that money to the tab, and total discretionary domestic spending is up closer to 30% from 2008-2013.

Of course, relief money is for preventing economic devastation from following unexpected physical devastation. The “end-runs” are simply ways for the federal government to expedite money to the relief area to deal with the broader impacts of the disaster. For a New York-based institution to treat New York-area relief money as wasteful pork is … interesting.

Eventually, the WSJ gets around to the fact that an abrupt slashing of federal spending will kill jobs. Their reaction: no biggie.

The sequester will surely require worker furloughs and cutbacks in certain nonpriority services. But most of those layoffs will happen in the Washington, D.C. area, the recession-free region that has boomed during the Obama era.

This downplays things just a smidge.

The Bipartisan Policy Center, not exactly a left-wing institution or Obama house organ, estimated the sequester will vaporize 1 million jobs that would have been otherwise been created this year.

As we still haven’t won back all the jobs lost from the 2008 crash, to see 1 million jobs disappear is, well, scary.

The Wall Street Journal editorial board presumably is composed of people whose taxes might go up more if there was a bipartisan compromise, but being employed, would not notice if 1 million fewer jobs were created this year.

If your interests diverge from theirs, consider telling Congress: Disarm the Austerity Bomb, Repeal The Sequester.

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