When asked earlier this month about the job loss that would occur if the continuing resolution passed by House Republicans were actually implemented, Speaker John Boehner (R-OH) replied “so be it.” “We’re broke. It’s time for us to get serious about how we’re spending the nation’s money,” he said.
And Boehner is evidently not the only one who feels that budget cuts should be imposed with complete disregard for their effect on employment. In an interview with NPR’s Steve Inskeep today, Gov. Mitch Daniels (R-IN) was asked if budget cuts should still go forward, even if they would result in widespread job loss, and replied “yes”:
INSKEEP: I want to ask something that a lot of people are confronting right now, as they deal with the federal deficit as well as state and local deficits that need to be closed. Are budget cuts — government budget cuts — worth it, even if they end up seriously costing a lot of jobs right now?
DANIELS: The answer is yes.
Last week, economists at Goldman Sachs estimated that the House Republicans’ continuing resolution would cause GDP to drop by 1.5 to 2 percent, which CAP economist Adam Hersh explained would translate into a one percentage point jump in the unemployment rate. Before that, the Economic Policy Institute found that the Republican plan would cause a loss of nearly one million jobs.
As if we needed more evidence of the effect GOP spending policy could have on employment, Moody’s Analytics predicted today that the House Republican plan would cause the loss of 700,000 jobs:
A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday…[Moody's Chief Economist Mark] Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.
Republicans rode into the House majority chanting “where are the jobs?” but multiple independent analyses have now found that the vision they have for the federal budget would make unemployment substantially worse.
Cross-posted on Wonk Room.