Democrat Led Government Hiring Spree Result of Economic Troubles or a Cause?

Posted on May 1, 2008

USA Today has a piece on how the only sector still growing the number of new hires is state and local government. It talks about how this is softening the blow of a private sector reduction in new hirin and that government hiring can be a result of economic downturns.
Problem is, it also points out the increase in state and local hiring (and spending) started last July - before there was a downturn in the oveall economy. In fact the dramatic increase in spending really resulted from the take over by Democrats after the 2006 elections. July 1st was the first day most of those new big spenders put in place their bloated new budgets, many based on pie in the sky economic forecasts.

The overall economy was still booming ahead, but not as much of a boom as the Democrats were counting on. Many state and local governments are in deficit situations even though they added new taxes and fees to their revenue streams.

To me it seems the boom in government hiring and spending is one of the causes of the economic distress that followed. Government spending is a drain on the economy, stifling real economic growth. Government jobs stifle productivity by private industry by siphoning off the cash needed for businesses to grow. Businesses also see the increases in taxes and fees as just the tip of an iceberg - they can see the governments are spending beyond their means and will be increasing companies’ costs yet again.

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