The Incredible Shrinking U.S. Government

By Jordan Weissmann

What do Republican presidents Reagan, Bush I, and Bush II have in common that Obama doesn't? Total government grew under those presidents after they faced recessions. By contrast, federal, state, and local government has declined by more than half a million workers in the last three years. Big government ain't what it used to be. epi_snapshot-publicemployees.png

The graph above comes courtesy of the Economic Policy Institute. Since the recession officially ended in January 2009, the economy has bid goodbye to 584,000 government jobs (private sector employment is up by 2.8 million). That's a roughly a 2 percent drop. Though the federal workforce actually grew between 2009 and 2011, it's now shrinking at the fastest rate since the 1950s, as my colleague Derek Thompson has written. By comparison, government payrolls increased by at least a full percentage point during the thirty months after each of the last major recessions, while Republican presidents presided over the economy. 

It's difficult to measure precisely what effect these losses ave had on the unemployment rate. The EPI argues that "these extra government jobs would have helped preserve about 500,000 private sector jobs." I'm not honestly in a position to critique their math. But I can say this much: there are now 196,000 more unemployed government workers than at the beginning of the recovery. The remainder have either found jobs in other industries, in which case they've displaced other applicants, or have left the job force.  

It's sad because it was preventable. More aid to states could have kept them from cutting back so severely. That would have meant more people paying taxes, more people able to keep up with payments on their homes, and more people shopping in stores. The individuals who lost their jobs were teachers and firefighters, trash collectors and police fighters, and yes, probably a fairly large assortment of bureaucrats responsible for running that sometimes creaky machine called government. And our economy is poorer for their loss.

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