Tuesday, June 28, 2011

Tea Party Zombie Lie #3008: Cutting Spending Creates Jobs (UPDATED)

Sorry, Charlie! Spending Cuts Don't Create Jobs...

From the start of the Great Recession in December 2007 through the end of 2010, 24 states have cut government spending by an average of 7.5 percent after adjusting for inflation. Another 25 states have expanded government outlays by an average of 11 percent. (The analysis excludes Alabama due to data problems reported by the National Association of State Budget Offices). And the differences in these states’ economic performance could not be more self-evident.
 UPDATE: I checked with the author and the correlation is -0.59 which indicates a moderate negative correlation.  In other words, the lower the spending cuts the higher the employment levels (the downward sloping line in the chart above).

No comments:

Post a Comment