The Missing Economic Context of Budget Impasse Reports

In coverage of the budget negotiations in Washington, which have largely revolved around how much money will be cut from the federal budget, it’s rarely acknowledged that the standard economic assumption is that reducing government spending at a time of diminished economic activity will destroy jobs. As a rule of thumb, every $1 billion in spending cuts eliminates roughly 10,000 jobs. (The Economic Policy Institute provides a slightly more sophisticated explanation here.)

Given the the public consistently tells pollsters that job creation should be the country’s top priority–often picked over deficit reduction by wide margins–this information should be included in every article on the budget debate. Thus when the New York Times (4/8/11) says that the Obama administration has agreed to $34.5 billion in cuts, and House Speaker John Boehner is pushing for $39 billion, the paper should note that the administration’s position would cost approximately 345,000 jobs, while Boehner’s would reduce employment by about 390,000.

I suspect that the inclusion of this information would rapidly change the debate.

About Jim Naureckas

Extra! Magazine Editor Since 1990, Jim Naureckas has been the editor of Extra!, FAIR's monthly journal of media criticism. He is the co-author of The Way Things Aren't: Rush Limbaugh's Reign of Error, and co-editor of The FAIR Reader: An Extra! Review of Press and Politics in the '90s. He is also the co-manager of FAIR's website. He has worked as an investigative reporter for the newspaper In These Times, where he covered the Iran-Contra scandal, and was managing editor of the Washington Report on the Hemisphere, a newsletter on Latin America. Jim was born in Libertyville, Illinois, in 1964, and graduated from Stanford University in 1985 with a bachelor's degree in political science. Since 1997 he has been married to Janine Jackson, FAIR's program director. You can follow Jim on Twitter at @JNaureckas.