How do you offset the loss of jobs from cutting government spending?
Many people in various countries around the world are advocating cutting government spending as a means of debt reduction. Yet in quite a few of these countries, it seems unemployment is high. A portion of government spending goes to paying wages to its workers. If we eliminate some government jobs, what effect will this have on these unemployment rates? Can economies recover if unemployment remains high?
Public Comments
- we have to spend more in private sector to off set.. But i don,t think we can spend enough money to keep system going
- Technically, you should cut taxes with the money you save. That gives people more money to spend, creates more demand and therefore more jobs. Unfortunately governments have been spending far more than they 'earn' and now have to cut spending to pay back their debts. The only thing that will fix it, is growth in the private sector. That can be helped by much less bureaucracy and regulation, some of which will come automatically with less bureaucrats due to spending cuts. But the rest needs to come from positive actions by government. As most governments have been doing exactly the opposite for many years, it will be interesting to see what happens. One thing you can be certain of, deafening whines from the bleeding hearts.
- The less Govt spends the more the private markets will have to spend and then real growth and jobs get created. Yes there is a lag and thereis a spike, but if we continue as is there will be no private market in 10 years. Obama has already nationalized 25 percent of the US economy in 2 years, YIKES! Macro Econ 101, Go to college and try it. Old Guy
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