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U.S. Opinions: New York

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Government does create jobs; candidates wrong to deny it

From an editorial in Monday’s New York Times:

In the last presidential debate between President Barack Obama and Mitt Romney there was a less noticed, but no less remarkable, moment when Obama agreed on something with Romney – and both were entirely wrong.

In an exchange that began with a question about the offshoring of U.S. jobs, Romney interrupted Obama to say, “Government does not create jobs.”

It was a decidedly crabbed response to a seemingly uncontroversial observation, and yet Obama took the bait. He said his political opponents had long harped on “this notion that I think government creates jobs, that that somehow is the answer. That’s not what I believe.” He went on to praise free enterprise and to say that government’s role is to create the conditions for everyone to have a fair shot at success.

So, they agree. Government does not create jobs. Except that it does, millions of them – including teachers, police officers, firefighters, soldiers, astronauts, epidemiologists, anti-terrorism agents, park rangers, diplomats, governors (Romney’s old job) and congressmen (like Paul Ryan).

At last count, government at all levels – federal, state and local – employed 22 million Americans, with the largest segment working in public education. Since the late 1980s, the number of public sector workers has averaged about 7.3 for every 100 people. With the loss of 569,000 government jobs since June 2009, that ratio now stands at about 7 per 100.

Public sector job loss means trouble for everyone. Government jobs are crucial to education, public health and safety, environmental protection, defense, homeland security and myriad other functions that the private sector cannot fulfill. They are also critical for private sector job growth in two fundamental ways. First, the government gets its supplies from private sector companies. Second, government spending on supplies and salaries reverberates strongly through the economy, increasing demand and employment.

That means the economy suffers when government cuts back. An Economic Policy Institute report examined the effect of recent cutbacks at the state and local level – including direct loss of government jobs. If not for state and local budget austerity, the report found, the economy would have 2.3 million more jobs today, half of which would be in the private sector.

The government most certainly does create jobs. And at this time of state budgetary hardship, a dose of federal fiscal aid to states and localities could create more jobs, in both the public and private sectors.

The views in U.S. Opinions are not necessarily those of the Observer’s editorial board.
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