In his weekly presser, Sen. Mitch McConnell gave some revealing answers to questions about the potential economic impact of spending cuts. First off: If some government workers lost jobs because of the cuts, it was overdue.
“Unemployment among government workers is about 4.5 percent,” said McConnell. “Most of those government workers work for state and local government. The federal government over the last two years has added 100,000 employees. The only industry in America that’s not sacrificing in this current downturn is government employees. I can’t tell you some federal worker won’t be affected by reducing government spending, but we have largely insulated the federal government from this recession.”
McConnell was asked a similar question about the impact of cuts; he continued the argument.
“If government spending would stimulate the economy, we’d be in the middle of a boom,” he said. “We don’t think there’s any case to be made that the failure to reduce spending is going to be disastrous for the economy. Chairman Bernanke was asked a question last week about the House-passed bill, whether it would have an adverse impact on the economy, and I believe his answer was he didn’t think so.”
What Bernanke
actually said
was that the House bill would cut GDP growth and jobs in the short term – he estimated 200,000 job losses, or less than 1/3 as many losses as predicted by Mark Zandi.
