JONATHAN CHAIT OCTOBER 8, 2010
In light of this morning's terrible jobs report, it's worth reiterating that the U.S. is not undergoing some giant Keynesian fiscal experiment. Rather, the federal government is employing Keynesian policies, which are being offset by Hooverian policies at the state and local level, which are slashing government payrolls:
While total government jobs fell by 159,000, private sector companies added 64,000 jobs last month. The unemployment rate, which measures the percentage of workers who are actively looking for but unable to find jobs, stayed flat at 9.6 percent.
Now, private hiring is anemic as well. But the Republican policy of opposing fiscal aide to state and local government is directly helping produce the kind of terrible job results that a propelling them to victory in November. Quite a racket.