[economix.blogs.nytimes.com]

In fact, while the latest recession was particularly deep, the recovery in private-sector employment, once it finally started, has not been particularly slow by recent historical standards.
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But there is something historically different about this recession and its aftermath: in the past, local government employment has been almost recession-proof. This time it’s not.
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It has become commonplace to contrast the American and European responses to the Great Recession, with stimulus in the former and austerity in the latter. European austerity has been at the level of member states and local governments — there is no meaningful federal government of Europe to provide either stimulus or austerity. But the United States has also seen unprecedented austerity at the level of state and local governments, and this austerity has slowed the job recovery.

Since this has been going on since at least 2008, I'm amazed anyone is even surprised.

The root cause in my opinion ?

State and Local governments are not ALLOWED to "Invest". They must live within their means. And when their income dropped, so did their services.

"It's Just Math".

But they could be assisted through federal stimulus spending, as they were partially in 2009 and 2010.
That's a debt that could be quickly repaid because the impact of those people: teachers, firemen, policemen, and the multiplier effect of their salaries is very powerful.

Lemon.. those people are long laid off. That Federal investment in states was a finger in the dike. All it did was provide an additional year or two of employment. Stimuluses are supposed to be 'investments'... an investment that provides long term future benefits.

Paying people to do a job when their customers cannot afford them is a short term bandaid only. It was obvious at the time, and still is.

States and Local governments could not afford those people or the services they provide, no matter how critical those services are.

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cbelt3
Lemon.. those people are long laid off. That Federal investment in states was a finger in the dike. All it did was provide an additional year or two of employment. Stimuluses are supposed to be 'investments'... an investment that provides long term future benefits.

Paying people to do a job when their customers cannot afford them is a short term bandaid only. It was obvious at the time, and still is.

States and Local governments could not afford those people or the services they provide, no matter how critical those services are.

Local government employee here.

In my small municipality, we have reduced the workforce significantly. We haven't laid anyone off yet...we have only not replaced retiring police and fire personnel. We have less firefighters on the truck going to the fire and fewer cops on the street. We haven't had any deaths in fire in recent years, and I don't have any crime data handy, but statistically, as of 2009, our municipal crime rate is 50% of what it was in 1991.

We have been replacing veteran department heads making $90k/year with PT consultants making $50k/year or less. It's a minor annoyance but we're coping.

Our total staffing in DPW has decreased by 10%. This means that streets and sidewalks aren't getting repaired as often as they were, the grass grows a few inches taller in local parks.

Many other municipalities in my state have resorted to layoffs, and the reductions in support staff at the State level has been staggering. The loss of institutional knowledge means that many of the bureaucrats making important decisions and keeping an eye out for public-sector hijinks are young and inexperienced.

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cbelt3
Lemon.. those people are long laid off. That Federal investment in states was a finger in the dike. All it did was provide an additional year or two of employment. Stimuluses are supposed to be 'investments'... an investment that provides long term future benefits.

Paying people to do a job when their customers cannot afford them is a short term bandaid only. It was obvious at the time, and still is.

States and Local governments could not afford those people or the services they provide, no matter how critical those services are.

One of the things a stimulus package can do is have investments in things like infrastructure. That is certainly a very worthwhile thing to do since good investments in infrastructure pay for themselves many times over because of the increase in productivity they make possible. But the primary purpose of stimulus is to maintain demand when it becomes slack in a recession. An economy is not going to perform well if supply and demand are not in rough equilibrium. In recessions, demand lags against supply, dragging economic activity below its potential (with the terrible consequence of people losing their jobs).

Every Republican president in modern times has introduced some stimulus during recessions to provide that bandaid of demand to keep up economic activity until private demand gains enough momentum for government to be able to "pull off" the stimulus bandaid. The basic underlying idea isn't different in this recession. What's different is that private sector demand fell off a cliff rather than stumble some as had happened in most previous recessions. That requires a bigger bandaid and leaving a bandaid on longer to let private sector demand recover.

Get used to a lower level of government employment. The rich don't much need those services and thry don't plan on paying for what they don't need. In many states lower public sector employment is being institutionalized.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

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the_poochies

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cbelt3
Lemon.. those people are long laid off. That Federal investment in states was a finger in the dike. All it did was provide an additional year or two of employment. Stimuluses are supposed to be 'investments'... an investment that provides long term future benefits.

Paying people to do a job when their customers cannot afford them is a short term bandaid only. It was obvious at the time, and still is.

States and Local governments could not afford those people or the services they provide, no matter how critical those services are.

Local government employee here.

In my small municipality, we have reduced the workforce significantly. We haven't laid anyone off yet...we have only not replaced retiring police and fire personnel. We have less firefighters on the truck going to the fire and fewer cops on the street. We haven't had any deaths in fire in recent years, and I don't have any crime data handy, but statistically, as of 2009, our municipal crime rate is 50% of what it was in 1991.

We have been replacing veteran department heads making $90k/year with PT consultants making $50k/year or less. It's a minor annoyance but we're coping.

Our total staffing in DPW has decreased by 10%. This means that streets and sidewalks aren't getting repaired as often as they were, the grass grows a few inches taller in local parks.

Many other municipalities in my state have resorted to layoffs, and the reductions in support staff at the State level has been staggering. The loss of institutional knowledge means that many of the bureaucrats making important decisions and keeping an eye out for public-sector hijinks are young and inexperienced.

All this is a side effect to the "starve the beast" approach to government funding. The real targets are regulators and regulatory budgets. They'll not rest nor will they divorce themselves from the social conservative movement until that is achieved.

Once they get what they most want other issues will not matter and current support the business community provides for Tea Party issues and candidates will start to recede.

Really? The deficit in August was $192 billion and for FY 2012 the deficit stands at $1.17 trillion.

How is this starving the beast?

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Bryan
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Grumpyguy
Really? The deficit in August was $192 billion and for FY 2012 the deficit stands at $1.17 trillion.

How is this starving the beast?

They fed the banks and people lost their homes, still are.

This would lead us to believe you actually think those in power will ever actually do anything except strive to keep themselves in power. I'd be interested to see any examples of political altruism you'd be prepared to offfer.

"Starving the Beast" as I understand it is depriving government money to do oversight. It's strictly a business oriented problem/solution. Starve the government and they won't have enough money to regulate you, that seems to be the goal.

Starving the beast means another Great Depression. President Hoover starved the beast, FDR fed it a bit until WWII when we shoveled money into the government and from there out into the economy and the country boomed. The current stimulus was simply much too small.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

I agree with Ted King, Roger and Speedy. I wish we had a Like button so we didn't have to increase the thread length when offering agreement.

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"Stop thinking about art works as objects, and start thinking about them as triggers for experiences." ~ Brian Eno