Feature Story

January 13, 2010

Private sources of spending cannot sustain job growth

From Economic Policy Institute:

A growing chorus of policy makers maintains that the U.S. economy needs no more help from the public sector in creating jobs. Some have even argued that the remaining public spending authorized by the American Recovery and Reinvestment Act (ARRA) should be cancelled.

That would be a recipe for prolonging the deep jobs crisis that is sure to persist for years to come. The recession that began in 2008 saw the longest consecutive stretch of negative quarterly growth rates (four) since such data began being kept in 1947.

The figure in this post shows that without the public spending made under the Recovery Act last year and the Economic Stimulus Act of 2008, the U.S economy would have actually seen six straight quarters of contraction followed by another quarter of zero growth.

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