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October 6, 2011

“…Not all U.S. cuts are equal when it comes to jobs and prosperity”

Following is from the Market Watch October 5, 2011:
“And yet every $1 billion spent on the military creates fewer jobs than it would on either education or infrastructure projects, according to a report from the Political Economy Research Institute at the University of Massachusetts Amherst.
Spend $1 billion on defense and the government creates about 8,555 jobs, the report said. That same amount spent on mass-transit projects would create 19,795 jobs, or 17,687 jobs in education.
Even tax cuts to spur personal consumption creates more jobs: 10,779 for each $1 billion trimmed from worker deductions, though that’s a high-end estimate.
So if the goal is to reduce government spending while keeping down unemployment, it would follow that fewer jobs would be put at risk if Congress trimmed the fat from the Pentagon budget and shuffled the savings to domestic projects.
Yet there are plenty of reasons to believe that this isn’t the course that Congress will take.
Most analysts say they instead expect Congress to get bogged down in ideological disputes that will prevent them from agreeing on ways to reduce the deficit by a November deadline set out in the Budget Control Act of 2011.”
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