Republican debt limit crises have cost 900,000 jobs, says Conservative think tank
The Peter G. Peterson Foundation is a think tank founded by Richard Nixon’s Secretary of Commerce, focused primarily on “fiscal responsibility” and dedicated to cutting social services and safety net programs. They sponsored the first Republican primary debates in the last election. They are not exactly commies.
However, this week, they released a macroeconomic analysis, The Cost of Crisis-Driven Fiscal Policy“ which shows that the Republican policy of keeping the country in crisis mode in regards to the debt limit has increased the country’s unemployment rate by 0.6%, or the equivalent of 900,000 jobs since 2011.
By crisis mode, they mean things like refusing to raise the debt limit, sequestration, shutting down the government because they don’t like Obamacare. The fiscal uncertainty caused by a government essentially throwing temper tantrums every time it doesn’t get what it wants, unsurprisingly, results in employers not wanting to hire new people.
Oh, and the reductions in discretionary spending? The study found that those have raised the unemployment rate 0.8%– or 1.2 million jobs.
Keep in mind, this isn’t me saying this. It’s not Bernie Sanders or Elizabeth Warren. In fact, this is a group that probably disagrees with me, Bernie Sanders and Elizabeth Warren on practically everything. They are telling you this isn’t working out. They are telling you that this is costing us jobs.
I will tell you, however, that it’s pretty damn hypocritical of the GOP to go around screwing with our economy like this and then crying about how all the mean poor people are stealing their moneys via social safety nets. Because hey, we’d probably need less of a social safety net in the first place if they weren’t pulling this crap. In what world do you get to actually cause unemployment, and then get mad when people can’t support themselves?
The study also showed that continuing down this path, we could end up losing jobs by the millions:
Additional top-level findings include:
- Fiscal Policy Uncertainty: Since late 2009, fiscal policy uncertainty has raised the Baa corporate bond spread by 38 basis points, lowered GDP growth by 0.3 percentage points per year, and raised the unemployment rate in 2013 by 0.6 percentage points, equivalent to 900,000 lost jobs. (Page 8)
- Government Shutdown: A 2-week partial government shutdown would directly trim about 0.3 percentage points from 4th-quarter growth. (Page 8)
- The Debt Ceiling: The paper considers two scenarios. The first assumes a brief, technical default that is quickly resolved, and the second assumes an extended, two-month stalemate. (Page 9)
1. In scenario one, risk aversion rises, financing costs rise, prices of risk assets fall, and the economy enters a recession. Exacerbated by the Fed’s inability to lower short-term interest rates, growth only begins to rebound at end of 2014 and the unemployment rate rises to a peak of 8.5% before starting to decline. At its peak, 2.5 million jobs would be lost. (Page 10)
2. Scenario two implies a longer and deeper recession than in the first scenario, but one characterized by extreme volatility. Annualized GDP growth fluctuates rapidly between plus and minus 8% until the oscillations diminish in 2015. Unemployment rises to a peak of 8.9% — equivalent to 3.1 million lost jobs — before trending down. (Page 13)
Discretionary Spending: Reductions in discretionary spending have reduced annual GDP growth by 0.7 percentage points since 2010 and raised the unemployment rate 0.8 percentage points, representing a cost of 1.2 million jobs. (Page 4)
This isn’t cute any more. These people are costing us our livelihoods. They are willing to risk jobs, they are willing to risk the health of the infants they are so quick to defend while they’re still zygotes–hell, they are willing to risk their own favorability ratings, just to continue having temper tantrums all over the place simply because they’re mad over having lost an election! Get over it. Act like adults. Accept the fact that you cannot always have candy for breakfast and move the hell on.