Oddbean new post about login | logout The jobs. I have zero doubt removing wasteful spending would result in public job cuts, obviously, but not sure how you get to a number.
$2 trillion is a big number. Government employs about 22m people. Government spends $7.0T and collects $5.0T revenue $2T / $200,000 = 10 million jobs. Seems like the right ballpark, might be even more job cuts if welfare and defence purchases are maintained.
That's what I figured you might be doing. Very pessimistic view, IMHO. Time will tell
I’m not sure if your “pessimistic” means more or fewer job cuts or a a greater or smaller saving than $2T.
I mean attributing each dollar to direct payroll cuts is flawed.
That’s not what I did. I don’t think $200,000 is the mean pay for government employees.
I think the average federal employee easily costs ~$200k. The average salary was over $100k, and in 2021. The average cost of benefits per employee was roughly $50k. Factor in inflation and 5.2% federal pay raise coming in January, I think $200k is easy
BLS says mean total employer costs were $46.21 per hour for civilian government workers for the month of June 2024. bls.gov/news.release/pdf/ecec.pdf Do government workers average 83 hours per week?
those figures do not come close to capturing the full cost of each federal employee (both directly employed or contracted)...
Are you saying there is some cost of government employees and contractors that’s not accounted for in the government budget? There are parts of the US government that make revenue from state owned businesses like Amtrak, the Tennessee Valley, and the Alaska oil field licensing. Others that could operate at a profit but choose to run a loss in order to subsidize parts of the economy like the national forest service which makes paper and lumber cheaper for housing and industry. My point is that the government budget + debt sold pretty much does account for the fully encumbered cost of employees and materials. Some governments occupy about 15% of the economy, some do 50%. The US government spending is on the lower end of wealthy countries. Does the US government spend its money well? Doesn’t seem like it, $900 billion a year on the military is just under half of all money spend on militaries by all governments. And the US is particularly bad at government contracting for infrastructure, spending much more than Asian and European countries for the same work. I just don’t see any politician wanting to reform that because the money goes to contractors who then fund the elections of those politicians.
Buy more corn
I have very little interest in benchmarking our federal spending against other countries. America was exceptional for a reason. We have lost the plot. Things that matter to me: 1) Have the States knowingly consented to The Administrative State? 2) Is Federal spending sustainable? Like all government statistics, the BLS provided stats are a huge shell game.
Wonder what that would do to unemployment numbers and Fed mandate for employment—perhaps resulting in “accommodative monetary policy” to combat the reduction in GDP? The analysis I saw showed a rough estimate of increased unemployment by 1-3% and a near term drop in GDP of $3-4 trillion.
If the private sector doesn't replace these jobs, what does that tell you about the jobs?
I mean, the assumption is the private sector is more efficient and more productive, and there would be a lot of people to retrain and a lot of those jobs would shift into the private sector if the jobs were indeed essential in some capacity, but presumably not all.
I’m just surprised it wasn’t the main focus for the Democrat campaign. They barely mentioned it. Vivek was talking about 50% being fired, Elon is of similar mindset. Trump talks about the savings Elon made at Twitter where it’s claimed he cut 80%. Nobody really pushed them on this in terms of what it actually means and who the consequences will fall on. I guess we now get to find out. https://image.nostr.build/0f2d495fd4bc1d3011d04369ae8c05ca109476801fc67bd8145256c5be5e3177.jpg
