That spate of new Republican legislatures enacting austerity? They’re doing more harm than good:
Cutting state services not only harms vulnerable residents but also slows the economy’s recovery from recession by reducing overall economic activity. When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy.
Moreover, many of the services being cut are important to states’ long-term economic strength. For instance, research shows that in order to prosper, businesses require a well-educated, healthy workforce. Many of the state budget cuts described here will weaken that workforce in the future by diminishing the quality of elementary and high schools, making college less affordable, and reducing residents’ access to health care. In the long term, the savings from today’s cuts may cost states much more in diminished economic growth.
If cutting state services worked as economic stimulus, then the states with deep austerity in place ought to be doing better than states that resist cuts. But the opposite is true:
Relative to national economic trends, states that increased spending enjoyed on average:
- 0.2 percentage point decrease in the unemployment rate
- 1.4 percent increase in private employment
- 0.5 percent real economic growth since the start of the recession
In contrast, states that cut spending saw on average
- 1 percentage point increase in the unemployment rate
- 2.1 percent loss of private employment
2.9 percent real economic contraction relative to the national economic trend
Those bullet points don’t include Alabama. My state is so broken that it can’t adequately answer simple queries for data. This is nothing new. I can guarantee the reader that the best sources for data in this state are not government ones; the “beast” in Montgomery has been starved for a century. Remember when I warned you that we can all live in Alabama now? Remember “progressives” telling me I was alarmist, an Obamapologist, and choice other phrases? I wasn’t kidding, and progressives had better start focusing less myopically on the top of the ballot. The downballot races are where the crazy thrives, and it means to break all of us.