US Austerity: Reached 30 year low in Government workers as % of the Population

[scottcarter]

After Obama’s first fiscal year in office, a record deficit amount had been added to the national debt: $1.4 trillion. Recently, the president boasted about having cut the deficit in half – to a fiscal year 2013 deficit of $680 billion.
The non-partisan Congressional Budget Office published a chart in its 2014 Long-Term Budget Outlook that shows just how important this achievement is when it comes to the Federal Debt Held by the Public:


The problem with the president’s boast is that America’s debt burden doesn’t resolve, while its labor force shrinks and its government dependents increase. The economic output of the nation continues to worsen with historic non-recession negative GDP growth of 2.9% in the first quarter of 2014.
This is important because worsening economic output confirms the harmful effects of a burdensome national debt and defies rosy projections the government can “have its cake and eat it too” when it comes to spending beyond our means.

 

[akphidelt]

After Obama’s first fiscal year in office, a record deficit amount had been added to the national debt: $1.4 trillion. Recently, the president boasted about having cut the deficit in half – to a fiscal year 2013 deficit of $680 billion.
The non-partisan Congressional Budget Office published a chart in its 2014 Long-Term Budget Outlook that shows just how important this achievement is when it comes to the Federal Debt Held by the Public:


The problem with the president’s boast is that America’s debt burden doesn’t resolve, while its labor force shrinks and its government dependents increase. The economic output of the nation continues to worsen with historic non-recession negative GDP growth of 2.9% in the first quarter of 2014.
This is important because worsening economic output confirms the harmful effects of a burdensome national debt and defies rosy projections the government can “have its cake and eat it too” when it comes to spending beyond our means.

I really don't think we should be trying to reduce the deficit at all right now. We should be trying to increase productivity and lower unemployment.

One of the biggest logical fallacies people use is the size of the government relative to the economy in recessions/depressions. Basic mathematics under the economic theory I follow will tell you that the government will be the largest when the economy is the weakest. That's the whole point of the theory, lol.

 

[The Guesser]

So, good news for conservatives... bad news for the United States. Government workers on both the state, local, and federal level are all at 30 year lows as percent of the population. We have had the largest decrease in government jobs percentage and quantity wise in the last 60 years.

There is no question about it, the do-nothing obstructionist Republicans are getting what they asked for. This is fiscal conservatism at it's finest. As most intelligent economists realize, destroying jobs is never good for an economy.

Too bad we can't have big government Ronald Reagan as President again. There is no doubt he'd convince his degenerate base of conservative voters that spending tons of money and hiring tons of government workers creates a prosperous economy.

Just look at the graphs. Completely opposite in regards to Reagan and Obama. Austerity will continue to fail and the country will continue to struggle year after year until we make real investments in to our most valuable commodity... the American laborer.

Sad to see... I almost want the Repubs to take control of the Senate, win the Presidential election in 2016, just because they would be able to convince people that we need to actually spend money to make money.

But But But, Obama is for Big Government and Government running everything, LOL. Of course, the truth is he's a Corporatist and a Centrist, and has been great for Big Business and wall Street, not so much for Government nor Government workers. I'll leave it to you and others who know more about economics than me, whether that is a net positive or negative for America. Funny, I don't see the usual suspects who hate everything Obama giving him any credit for this. Why am I not surprised? Shush()*

 

[Albatross]

In my line of work, the government has gotten to large to make progress in an efficient manner. Some is needed, but I would say only 30%

 

[wabashwonders]

Lol, so companies just randomly produce quantities of goods and services and has nothing to do with demand for those goods and services? Sounds very logical. You should go build

I've worked in manufacturing for over 25 years. We make on average about 50 million pounds of our product every year. Trust me, we don't just make that much for the hell of it and store it in our warehouse. We make that much because there is a demand for our product from our many customers. If we don't have the demand for a certain product, we don't make it. When we do have a demand for it, then we make it. The demand for our product has increased over the last few years and guess what? Jobs were created and our workforce grew from 70 to 85 employees(more than a 20% increase)

 

[guitarjosh]

Is that total government employees or federal?

 

[akphidelt]

I've worked in manufacturing for over 25 years. We make on average about 50 million pounds of our product every year. Trust me, we don't just make that much for the hell of it and store it in our warehouse. We make that much because there is a demand for our product from our many customers. If we don't have the demand for a certain product, we don't make it. When we do have a demand for it, then we make it. The demand for our product has increased over the last few years and guess what? Jobs were created and our workforce grew from 70 to 85 employees(more than a 20% increase)

It's funny how logical that sounds, lol. These guys are so far off from the real world it's ridiculous.

 

[akphidelt]

Is that total government employees or federal?

This is total govt. But even viewing the Fed Gov, it's at 30 year lows. Reagan had more federal employees than Obama.

 

[SheriffJoe]

More Government Equals Less Growth, The Facts Are In

Photo credit: Tax Credits


Governments around the world have tried a myriad of policies in mostly fruitless attempts to help their economies recover from the recent severe recession.

These policies, both tried-and-true and never-seen-before, have sparked a spirited debate among economists, central bankers, and policy makers about the role of government in economic policy. In particular, possibilities include that governments do little, cut spending, increase spending, cuttaxes, increase spending a lot, print money, lower interest rates, or increase spending a lot and cut taxes. All of these have been tried in different countries around the world. A look at the data gives us an early indication of what does not work: government spending.

It is still too soon for a definitive answer on the efficacy of the various policies tried in different countries. Further, given that other factors were at work besides a large recession and financial crises felt in most parts of the world and the variation in conditions from country to country, it will take some sophisticated economic modeling to sort everything out in the end. However, we do have enough data to take a quick look and make one early conclusion.

To do so, I collected data from the World Bank on every country for which it had the data on government spending and GDP from 2004 to 2011. I ended up with complete data for 104 countries ranging across six continents and from rich to poor. I collected data on each country’s GDP, its government spending as a percent of GDP, its government spending in dollars per capita, and its government spending in dollars.

The idea was to measure government spending three different ways: its share of the economy, its actual level, and the amount spent per person. I did this just in case the manner in which one determines whether government spending is “big” or “small” mattered to the result. In the end, it did not.

I used the GDP data to compute the growth in GDP from 2004 to 2011. This period includes a few years before the recession, the entire recession, and the first two years of the recovery. I would have used more recent data in order to include more of the recovery, but the government spending data for 2012 were very incomplete.

Next, I computed the correlation between each of the three measures of government spending (share, total, and per capita) and the growth in GDP over the seven year span. A correlation coefficient measures the tendency of two variables to move together. If one tends to go up when the other goes up, the correlation will be positive; if they move in opposite directions most of the time, the correlation will be negative. A correlation of zero implies the two variables are unrelated, positive or negative one implies an exact relationship between the two.

So if more government spending is good, the correlations should be positive. If they are negative, government spending leads to slower (or negative) economic growth.

The results showed that all three correlation coefficients were negative. The correlation between GDP growth and government spending’s share of GDP was -0.44, pretty strong and very statistically significant (for those who can remember their college statistics class at least vaguely). That means economies with larger government sectors grew more slowly over that seven year period.

The correlation between GDP growth and per capita government spending was also -0.44. The correlation between GDP growth and the dollar amount of government spending was -0.25. Thus, no matter how I looked at it, more government spending means less economic growth.

These data do not reflect whether a country was running a government budget surplus or deficit during this period (although nearly all of them, especially the developed ones, were running large deficits), so it does not directly address the value of running a deficit in the attempt to gain a Keynesian economic stimulus.

However, the level of government spending is generally under the government’s direct control, while tax revenues and, therefore, the deficit are only indirectly controlled by government. Also, it is government spending and the programs that spend all that money that tend to create the largest distortions in the free market. Taxes do cause some distortions, but in most cases these are smaller than those caused by government spending. Thus, focusing on spending makes sense.

Politicians have an obvious interest in larger government. More spending means more power, through the ability to direct the spending to the politicians’ chosen priorities and often supporters. Regardless of the impact of government spending on economic growth, government will inherently want to be large and to spend as much money as possible. However, this look at data from around the world suggests that government spending comes with a cost. If a country wants to get richer, it should reduce its government spending.

http://www.forbes.com/sites/jeffreydorfman/2013/12/10/more-government-equals-less-growth-the-facts-are-in/

 

[SheriffJoe]

I've worked in manufacturing for over 25 years. We make on average about 50 million pounds of our product every year. Trust me, we don't just make that much for the hell of it and store it in our warehouse. We make that much because there is a demand for our product from our many customers. If we don't have the demand for a certain product, we don't make it. When we do have a demand for it, then we make it. The demand for our product has increased over the last few years and guess what? Jobs were created and our workforce grew from 70 to 85 employees(more than a 20% increase)

Yes and no.

From your company's standpoint, manufacturing goods people want indeed produces more organic demand.

But printing money and reckless artificial government spending (what fratfraud believes in) in order to manipulate/boost/stimulate demand leads to a situation where companies commit themselves to unprofitable businesses and plans, which ultimately will have to be liquidated -- what economists call a 'bust' or 'recession.' The trigger to this liquidation is the reversal of a loose stance by the central bank. The severity of the recession is dictated by the intensity of the previous boom brought about by "false activities", i.e. monetary pumping, artificial low interest rates, reckless govt spending etc.

Creating artificial bubbles is what central bankers do best.

In a market economy, money has just one role - to provide the services of a medium of exchange. Increasing the money supply does NOT increase wealth or productivity, all it does it create false market signals which make the economy more vulnerable to a crash.

The stock market crash of 1929 is a great example because it came at the end of almost a decade worth of reckless expansion of the money supply, which of course fratfraud cites as a great success. face)(*^%

Anything above 25% GDP, government spending becomes counter productive. Government "consumption" is a total waste of resources.

 

[guitarjosh]

This is total govt. But even viewing the Fed Gov, it's at 30 year lows. Reagan had more federal employees than Obama.

Can you post federal only please?

 

[SheriffJoe]

Lol, so owning a business is the only meaningful role in America? Got it.

No, business owners aren't the only meaningful role, worker bees like yourself have a meaningful role to play as well.

BUT...

The academics and politicians you worship are out to attack and destroy the risk takers, under the guise of radical egalitarianism.

Draconian taxes, over regulation, corrupt crony capitalism, multiple layers of wasteful bureaucracy...all attack and inhibit risk-taking (RISKING AND SPENDING MONEY - something you won't shut up about) which slows growth and job creation.

The more radical and less market friendly the govt, the worse the growth and prosperity.

I don't have to spell it out any more than that, we're living through it - it's called Obamanomics!

 

[The Guesser]

Can you post federal only please?

Here's the latest info I can find. 2 seperate articles. Obama continues to slash the Federal Workforce at historical levels. Even state and Local Gov't Hiring is up, in this year of tremendous job growth overall, but Fed Gov't Workforce is still being cut, just like the Conservatives want. Where is their giving him credit for it?

http://www.governing.com/topics/mgm...r-all-public-sector-job-growth-this-year.html

and
[h=1]Barack Obama has shrunk the US federal workforce more than Ronald Reagan[/h] By Tim Fernholz @timfernholz February 10, 2014

But not nearly as much as Bill Clinton or Harry Truman.
+


The most recent US jobs report highlighted a trend that has defined president Barack Obama’s battle for jobs growth: Even as the private sector expands, reductions in the public workforce are dragging back total job creation—and economic growth.
+


But how does it fit in with the historical picture? Let’s start with what the president has the most control over: There have been three modern episodes in which federal employees have been cut during a presidential administration: the post-World War II demobilization under president Harry S Truman (1945-53); the Cold War peace dividend and budget cuts under president Clinton (1992-2000); and now Obama, who has downsized the federal government during the recession. Here’s a comparison:
+

But to get a full picture of the impact public hiring has had on the economy, look at the figures for total public employment, which includes state and local employees like teachers, police officers and firemen:
+

Clinton’s job cuts don’t even show up—the economic boom of the 1990s allowed states to keep hiring and make up the difference—and while Ronald Reagan’s first two years of domestic cuts in 1981 and 1982 resulted in reductions of 66,000 federal workers, by the end of his term he reversed course and hired a net 240,000 federal workers. Even Truman finished his term as a net public job creator despite demobilization, with 540,000 more people publicly employed when he left office.
+


But Obama, five years in, still has a public jobs deficit of 645,000 to make up if he wants to break even as a government job-creator. The problem is that even as federal workers have been downsized, state and local governments haven’t seen enough growth to make up for the recession costs like they did in the 1950s or 1990s, and federal aid to states during the recession has been delivered at levels consistently lower than Obama’s requests.
+


Obama still has three years to hypothetically make up the difference in public job creation between himself and his two federal employee-cutting predecessors, but just to break even government at all levels will need to hire more than 200,000 workers every year until his term ends, a fairly unlikely proposition. If he doesn’t, Obama will be the first modern president to leave office with fewer people publicly employed.
1




Share this:

 

[akphidelt]

Can you post federal only please?

I don't have the % of population but anyone who understands elementary math will know that it is the lowest it has been in the past 30 years by far.

What's striking about this is 30 years later we have nominally less federal employees. Usually when you compare time periods over 30 years it's relative increases because of changes, so when you have a nominal decrease over 30 years, that's pretty crazy.

 

[Willie99]

no wonder the economy is turning, albeit slowly

thanks for playing

 

[SheriffJoe]

More govt workers = growth and prosperity for all!

You know who told me that? My really, REALLY smart English professor!

 

[akphidelt]

More govt workers = growth and prosperity for all!

You know who told me that? My really, REALLY smart English professor!

It's funny how your education consists of random, irrelevant pictures with quotes on top of them. Conservatives are really dumb, lol.

 

[scottcarter]

AK, I will give you credit for one thing. The fact that you get beaten up so badly nearly every single tread when discussing anything to do with politics but you just keep coming back for more. If you were a boxer, the trainer would have thrown in the towel long ago but you keep on fighting when everyone knows the outcome won't be a good one for you. Maybe its all the Grizzly fighting you do up there in paradise?

Cheers to you taking a lickin' but keeping on tickin'. I know I couldn't do it.

Don't let Palin catch you egging her house.

 

[SheriffJoe]

It's funny how your education consists of random, irrelevant pictures with quotes on top of them. Conservatives are really dumb, lol.

You're incredibly dumb because you actually believe government spending and loose money create prosperity, instead of prudent policies which liberate private resources.

 

[akphidelt]

AK, I will give you credit for one thing. The fact that you get beaten up so badly nearly every single tread when discussing anything to do with politics but you just keep coming back for more. If you were a boxer, the trainer would have thrown in the towel long ago but you keep on fighting when everyone knows the outcome won't be a good one for you. Maybe its all the Grizzly fighting you do up there in paradise?

Cheers to you taking a lickin' but keeping on tickin'. I know I couldn't do it.

Don't let Palin catch you egging her house.

No matter how overconfident you act, it does not change basic mathematics and what real mainstream highly educated economists believe. No different than your global warming arguments. Very uneducated!