This morning, the
with a six-page memo* from Moody's Analytics economist Mark Zandi, which estimated potential job loss from GOP spending cuts at 700,000. I've posted the report below, but this is the gist:
While the government spending cuts proposed by House Republicans for this fiscal year mean only modest fiscal restraint, this restraint is meaningful. If fully adopted, the cuts would shave almost 0.5% from real GDP growth in 2011 and another 0.2% in 2012. There would be almost 400,000 fewer U.S. jobs by the end of 2011 than without the cuts and some 700,000 fewer jobs by the end of 2012. The fallout will extend into next year because it takes time for budget cuts to filter through the economy. In all likelihood, the proposed House cuts would not undermine the current recovery; still, it is not necessary to take the chance.
I've been calling around to Republicans, who are either 1) skeptical or 2) not back in town yet. But I note with interest the response from Majority Leader Eric Cantor's press shop, which includes a few articles about Zandi's defense of stimulus spending, and begins:
When considering the latest study from Mark Zandi on the GOP’s efforts to rein in government spending, let’s not forget that he was the chief architect of the Democrats’ failed stimulus plan. Even as unemployment climbed into the double digits, Mr. Zandi continued to defend this failed policy. It shouldn’t come as a surprise that he would come out against the GOP’s common-sense efforts to put an end to more stimulus-style spending.
Cantor's staffers are not the first people in politics to discredit a message by discrediting the messenger. It's just that the logic here, a legacy of two years of successful campaigning against the stimulus -- and a legacy of the stimulus failing to meet Democrats' projections for repairing the economy -- is so clean. It's not even worth discussing whether the spending cuts will cut jobs, when no one disputes that the cuts will cut jobs. The issue is that Democrats favor stimulus spending, and it didn't work, so their argument for keeping spending can be dismissed immediately. It can be dismissed even though the stimulus actually created or saved jobs -- to use the much-derided phrasing -- because it didn't create enough of them.
*It's seven pages, but the seventh is legalese.