Laying Off Government Workers in the Middle of a Recession Costs Jobs

Dean Baker writes Beat the Press.--SS

Laying Off Government Workers in the Middle of a Recession Costs Jobs:

A NYT piece on the likely failure of the supercommittee included a quote from Senator John Kyl:

"You can’t grow if you raise taxes in the middle of a recession.”

It would have been worth pointing out that according to the Congressional Budget Office and most standard economic models, it also hurts growth to have budget cuts in the middle of a recession. In fact, these models generally show that a dollar of spending cuts is considerably more harmful to growth than a dollar of tax increases. If Senator Kyl is primarily concerned about ensuring growth until we are out of the recession, then he would be resisting spending cuts right now rather than pushing them.

This piece includes a quote from Erskine Bowles. It would have been helpful to remind readers that Mr. Bowles is a director of Morgan Stanley, the Wall Street investment bank.