Expect lots of government layoffs at state, local level

[CARLHAYDEN]

Expect lots of government layoffs at state, local level

By Paul Davidson, USA TODAY
Here's another headwind for a sputtering job market: State and local governments plan many more layoffs to close wide budget gaps.
Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody's Economy.com.

The development could slow an already lackluster recovery. Friday, the Labor Department said employers cut 125,000 jobs, mostly because 225,000 temporary U.S. Census workers completed their stints. The private sector added 83,000 jobs, fewer then expected, as the jobless rate fell to 9.5% from 9.7%.

Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009.

But the pain is likely to worsen. States face a cumulative $140 billion budget gap in fiscal 2011, which began July 1 for most, says the Center on Budget and Policy Priorities.

While general-fund tax revenue is projected to rise 3.7% as the economy rebounds in the coming year, it still will be 8%, or $53 billion, below fiscal 2008 levels, according to the National Association of State Budget Officers.

Meanwhile, federal aid is shrinking. Money for states from the economic stimulus is expected to fall by $55 billion, says the National Governors Association. And the Senate last week failed to pass a measure to provide states $16 billion for extra Medicaid funding, an initiative that would have extended benefits from last year's stimulus. The House approved $25 billion in enhanced Medicaid funding.

Philippa Dunne, who surveys state financial officials for a newsletter, the Liscio Report, says most plan to intensify layoffs the coming year after relying largely on furloughs.

"The downturn has gone on so long, all the low-hanging fruit has been taken," says Scott Pattison, head of the state budget officers group.

Wells Fargo economist Mark Vitner expects state and local governments to cut about 200,000 workers this year if Medicaid benefits aren't extended. That's largely why Wells Fargo cut forecasts for third-quarter economic growth to 1.5% from 1.9%.

Even if Congress extendsMedicaid subsidies, Zandi expects 325,000 job cuts the next year, though Vitner says losses could be far less.

Among cuts planned and made:

•New York City is planning 4,500 layoffs, and more if the Medicaid subsidies aren't approved, says the Center on Budget and Policy Priorities.

•Washington state would have to chop 6,000 jobs without the Medicaid money.

•The city of Maywood, Calif., laid off all 68 of its employees July 1 and is contracting out police services, partly because of a $450,000 budget deficit.

[Ban my account ffs!]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

[opebo]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

[Ban my account ffs!]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

[opebo]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

No no, the Fed should just print up any deficits in state budgets during bad times.  It is beautifully easy stimulus.

[Ban my account ffs!]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

No no, the Fed should just print up any deficits in state budgets during bad times.  It is beautifully easy stimulus.

The problem is that some recessions have high rates of inflation because the money supply is already growing too fast.  Simply printing more can be detrimental.  In those cases borrowing is the better option.  During other recessions, like the traditional ones with deflation.. print away.

Conservatives also have to realize that not every recession needs a "Raygun Revolooshun" to boost the economy.  We have a demand problem.. not a supply problem.  Only government can really boost demand in such times.

[phk]

Of course this was bound to occur especially since the outbreak of the housing bubble and consumption spending declines.

The fiscal problem is that states cannot spend to keep employees employed without significantly increasing default risk.

Contraction of spending is more painful than increasing spending is helpful.

The best idea would be to remove Medicaid from administration at the state level and federalize it and end things like Tenn. Care.  This would give state budgets a huge break, and help employment. This will also reduce moral hazard problems.

[Ban my account ffs!]

Of course this was bound to occur especially since the outbreak of the housing bubble and consumption spending declines.

The fiscal problem is that states cannot spend to keep employees employed without significantly increasing default risk.

Contraction of spending is more painful than increasing spending is helpful.

The best idea would be to remove Medicaid from administration at the state level and federalize it and end things like Tenn. Care.  This would give state budgets a huge break, and help employment. This will also reduce moral hazard problems.

That would be a good idea.  It would also be nice for the federal government to simply spend the money necessary to plug the majority of deficits across the country, since they can do that (but Republicans would squeal like f**king stuck pigs.. that is, until someone trots out the giant sized check that they'll eagerly get in on the photo-op for!)

[Mr.Phips]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

No no, the Fed should just print up any deficits in state budgets during bad times.  It is beautifully easy stimulus.

The problem is that some recessions have high rates of inflation because the money supply is already growing too fast.  Simply printing more can be detrimental.  In those cases borrowing is the better option.  During other recessions, like the traditional ones with deflation.. print away.

Now is the time to print money.  There is no inflation and if anything, the economy needs some inflation to avoid falling into a deflationary spiral.  The Treasury should start by printing money to pay off part of the national debt and monitor the response.

[Derek]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

No no, the Fed should just print up any deficits in state budgets during bad times.  It is beautifully easy stimulus.

The problem is that some recessions have high rates of inflation because the money supply is already growing too fast.  Simply printing more can be detrimental.  In those cases borrowing is the better option.  During other recessions, like the traditional ones with deflation.. print away.

Conservatives also have to realize that not every recession needs a "Raygun Revolooshun" to boost the economy.  We have a demand problem.. not a supply problem.  Only government can really boost demand in such times.

How does government boost demand? Why would you want to lay around and depend on the government to make things better for you instead of taking the initiative and helping yourself?

[opebo]

Now is the time to print money.  There is no inflation and if anything, the economy needs some inflation to avoid falling into a deflationary spiral.  The Treasury should start by printing money to pay off part of the national debt and monitor the response.

In fact we are already in a deflationary spiral.  There is absolutely no danger from even very massive printing now.

How does government boost demand? Why would you want to lay around and depend on the government to make things better for you instead of taking the initiative and helping yourself?

Because you cannot help yourself, Derek.  Society is not run by your efforts, but by State policy.

[Ban my account ffs!]

Foolish loss of the perfect opportunity for demand-support.  We should print the money to pay these people.

Only the federal government can do that, obviously.  My state, for example, must have a balanced budget.  This is a good thing overall... but we should be leveraging massive reserve funds so we can spend like bandits during recessions and curtail it and build up the funds during good times.

No no, the Fed should just print up any deficits in state budgets during bad times.  It is beautifully easy stimulus.

The problem is that some recessions have high rates of inflation because the money supply is already growing too fast.  Simply printing more can be detrimental.  In those cases borrowing is the better option.  During other recessions, like the traditional ones with deflation.. print away.

Conservatives also have to realize that not every recession needs a "Raygun Revolooshun" to boost the economy.  We have a demand problem.. not a supply problem.  Only government can really boost demand in such times.

How does government boost demand? Why would you want to lay around and depend on the government to make things better for you instead of taking the initiative and helping yourself?

DOn't be stupid Derek.  Despite what some dumber conservatives might say.. that government is just a parasite living off of the wealth creation of others.. the government has a strong say in boosting supply and demand.

No doubt you will immediately credit Ronald Reagan with turning the economy around in the early '80s by cutting taxes and helping to boost supply and create jobs... do you honestly think they can't do the same on the demand side?

By printing money and spending it or simply borrowing it and spending it during a recession pumps money back into the economy.  The government becomes the force that picks up all the slack left by the ailing private sector.  That's why the stimulus bill was so infrastructure heavy:  The investment is sound because you can pay lower prices for materials and labor in a recession and the road that is built will last for a long time and help to move much more in economic benefits than it cost to build the road.  It puts construction people to work which also stimulates the economy.

Just tell me how you can reverse a recession by "not relying on government and going out and taking initiative yourself" when you

1)  Won't get the financing necessary to do what it is you want to do

2)  Will most likely fail because there isn't demand for your product or service.

In the end, you'll end up in a worse position relying even more on government.

This is truly basic economics.  When there is recession, you cut back.  The government should spend beyond its means... or simply print the means.

[Torie]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

\


Correct.

[Lief 🗽]

Republicans are destroying the country by refusing to support further deficit spending and engaging in class warfare, and are in turn rewarded with electoral support. What else is new?

[??????????]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

\


Correct.

I'm cheering, 70% of government jobs should be cut.

[Ban my account ffs!]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

\


Correct.

I'm cheering, 70% of government jobs should be cut.

And when you lose your job in the resulting economic collapse and then end up not being able to find work because of the vast number of more qualified workers suddenly competing for jobs... will you be glad then?

It's easy to cut 70% of government jobs sitting in your living room recliner and not thinking about the potential consequences.

[Derek]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

\


Correct.

I'm cheering, 70% of government jobs should be cut.

And when you lose your job in the resulting economic collapse and then end up not being able to find work because of the vast number of more qualified workers suddenly competing for jobs... will you be glad then?

It's easy to cut 70% of government jobs sitting in your living room recliner and not thinking about the potential consequences.

What's one bad thing about the government getting smaller? Seriously?

[Democratic Hawk]

The Republicans will cheer this! Fewer government employees means less so-shul-ism and it's a sting to the democRAT party.

\


Correct.

I'm cheering, 70% of government jobs should be cut.

And when you lose your job in the resulting economic collapse and then end up not being able to find work because of the vast number of more qualified workers suddenly competing for jobs... will you be glad then?

It's easy to cut 70% of government jobs sitting in your living room recliner and not thinking about the potential consequences.

What's one bad thing about the government getting smaller? Seriously?

Well your lot, at the federal level of government, sure as hell didn't practice what they preached for very long

[??????????]

My company is booming snow. We've never had a layoff in over 80 years of existence. We have no debt at all and make a profit every quarter. If I lose my job it would be my own damn fault.

[Democratic Hawk]

My company is booming snow. We've never had a layoff in over 80 years of existence. We have no debt at all and make a profit every quarter. If I lose my job it would be my own damn fault.

Is it the fault of these people if they lose their jobs?

[Derek]

My company is booming snow. We've never had a layoff in over 80 years of existence. We have no debt at all and make a profit every quarter. If I lose my job it would be my own damn fault.

And how much are you regulated by the government? I bet there is hardly any intervention at all.

[??????????]

My company is booming snow. We've never had a layoff in over 80 years of existence. We have no debt at all and make a profit every quarter. If I lose my job it would be my own damn fault.

Is it the fault of these people if they lose their jobs?

No, it's not their fault for anything. That's not the point, jobs are created and eliminated all the time. Should government jobs just continue into infinity? What do government workers actually produce?

[Beet]

Government workers produce a lot. The TSA for example, deters a lot of people who otherwise would try to cause harm on airplanes, thus making people feel safer to fly. This also lowers the cost of air travel.

[??????????]

Government workers produce a lot. The TSA for example, deters a lot of people who otherwise would try to cause harm on airplanes, thus making people feel safer to fly. This also lowers the cost of air travel.

Airport security is such a fraud, they pick on children and blue haired old ladies.

[Beet]

Government workers produce a lot. The TSA for example, deters a lot of people who otherwise would try to cause harm on airplanes, thus making people feel safer to fly. This also lowers the cost of air travel.

Airport security is such a fraud, they pick on children and blue haired old ladies.

"Pick on" is not really accurate. If their screening didn't have some element of randomness, criminals would know exactly what to do to slip through... use children and blue haired old ladies. Airport security does all passengers a favor, including children and blue haired old ladies.