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I want to point out a couple of facts to anyone celebrating this. 0. A reduction in X spending by the government means a reduction in X income to businesses an
by mempko 2y ago
I want to point out a couple of facts to anyone celebrating this.
0. A reduction in X spending by the government means a reduction in X income to businesses and households.
1. If you reduce the federal workforce, the private sector has to absorb them.
2. For the private sector to absorb them, they need the money to pay them.
3. If you say, cut $500 billion in salary from federal government, the private sector needs to come up with $500 billion extra income to pay those people.
4. The private sector will lose $500 billion in income because generally people spend what they earn. All those federal employees were buying from the private sector.
5. The private sector usually pays better than the government, therefore for every dollar "saved" in the government you probably need $1.5 dollars in revenue to absorb them in the private sector.
So given the facts above, I want to ask people who celebrate this, where will the private sector get the money to absorb these people when they lost in aggregate the same amount in revenue? The answer is they need to borrow. Which means the private sector racks up more debt. The debt they rack up will be exactly the amount (or more!) that the federal government doesn't spend.
- kadushka 2y agoWhy does private sector have to absorb them?
- mempko 2y agoI mean, yes, we can always choose to shrink the American economy and cause a recession or depression. We can certainly go down that path. It's just not a path most probably want to go down.
- JohnBooty 2y agoI would much prefer nearly other alternative... But at this point I'm rooting for pain and lots of it. It's literally the only way we're going to get this ruling party out of power. And even that might not be enough.
- mempko 2y agoThe dark part of me is like 'Ok, yes, I hope they implement their stupid plans so that people can see how stupid they are'. The sane part of me then thinks 'Well, a lot of people will be hurt and many die if they do.'
- JohnBooty 2y agoWell, it's kind of a trolley car-ish problem to me. When there is no longer an option of zero people being harmed, we start naturally start thinking about which is the lesser amount of harm -- X people being harmed during a quick crash and burn of Trumpian rule, or Y people being harmed over a greater number of years of sustained Trumpian rule. I do of course also hope that I am wrong about all of this.
- ben_w 2y agoEvery government faces that with almost every decision. Every aircraft carrier represents something like 40 never-built schools or 15 never-built hospitals. > I do of course also hope that I am wrong about all of this. You and me both.
- JohnBooty 2y agoEvery government faces that with almost every decision. Every aircraft carrier represents something like 40 never-built schools or 15 never-built hospitals. Well, it's complicated, right? When the government spends money it doesn't really leave the economy. $10bil on an aircraft carrier is also tens of thousands of jobs... half of the money goes right back to the government in taxes... etc.
- ben_w 2y agoComplicated? Only from a certain point of view. The USA has a workforce of something like 170 million. No matter how this is financed, no matter what form of government you have, their collective output is that of 170 million people. You get some of them to build, maintain, and crew an aircraft carrier, then those specific people are not going to be available for building, maintaining, and staffing 40 or so schools.
- x3n0ph3n3 2y agoPeople usually need to put food on their tables.
- locopati 2y agoWhy do you want a country full of people who can't eat, who lose their homes, who can't take care of their kids?
- D13Fd 2y agoWell it's that or they go unemployed.
- tailefer 2y agoWhat are the alternatives? Really, stay with the conversation here - what are the options that people will have if they lose their job because a "DOGE lead" deems their position no longer covered by statute? If they are ready to retire, then fine. But what about that 30 year old who just bought a house and had a kid? If the private sector can't absorb them, even at the same level of income as they have now, what will they do? How will they pay their mortgages or their rent? How will they put food on their table? How will they afford for any kind of healthcare? Implicit in the "why does the private section have to absorb them?" is the belief that government workers are not deserving of their jobs and, in fact, are not deserving of any job as they are lazy or incompetent. Perhaps that's not the particular thought that prompted the comment, but let's be honest - it's a common belief. We see it at the heart of the "return to work" cries that Musk and other MAGA supporters have been calling for -- people can't be trusted to do their work at home, they must be in a factory-like setting where their managers can oversee them. You know, crack the whip and all that. So what's the plan for the displaced workers? Beyond their hardship, what's the expected impact on our overall economy? By what criteria shall we judge these actions as successful? There is no plan, and the only expectation is chaos. Success will be judged by those who gain the most after the dust settles, and we should not fool ourselves to think that will include the typical person in the United States. But I'm willing to be convinced. If there's an argument to be made for this "shove the nation off the cliff" approach, then let's hear it.
- kadushka 2y agoI asked this question because we don't live in a communist society. No one owes me a job just because I exist. I get a job because someone wants to hire me, and if no one wants to hire me, then I will be unemployed. When unemployed, I would get some small government assistance money, just so that I don't starve to death, and I would get free basic healthcare (medicaid), but I would probably need to move to low CoL area, and give up any luxuries I can no longer afford. This seems fair to me, but I'm open to discussion.
- tailefer 2y agoThe memo specifically calls for initiating "large-scale reductions in force", focusing on those positions that are specifically covered by "statute or other law". That's not calling on government agencies to get better about cutting deadwood. It's calling for the wholesale elimination of positions that someone is filling right now, regardless of what that position does. The people who may be losing their jobs may be losing them not because they're bad at them. Someone did want to hire them. That's why they have a job now. A job that may be going away for ideological reasons, and not good policy or sound choices. These actions are not based on data that shows why this is most likely to achieve broadly supported goals based on the ideals of the United States. There is nothing to show how many people will be affected, what the likely impact on the private sector will be, and how that impact will be of overall benefit to society. It's a reactionary lashing out based this vague notion that "government is too big". No one owes you a job because you exist, but I believe it's only fair that if you have a job, it's not taken away without cause. Otherwise you have no basis on which to make any long-term plans -- part of that whole "life, liberty and pursuit of happiness" thing. Looking out for other people doesn't mean we live in a communist society, it means we live in a society that values making life better for more than just those at the top of the income ladder. By the way, the people calling to eliminate jobs, and perhaps put displaced workers on medicaid, are often the same people calling to cut medicaid. Slap with the right, punch with the left.
- deleted 2y ago[deleted]
- 7e 2y agoIf there is no corresponding tax cut, there will be a recession or depression. Even if there is a tax cut, there is no guarantee that money won’t be used for other things (to buy assets, save, or pay down debt).
- whoisthemachine 2y agoA tax cut probably won't do a lot to help people who aren't making taxable income.
- locopati 2y agoWhy would you cut taxes when you're trying to reduce a deficit? Especially taxes on the wealthy and on corporations?
- ben_w 2y agoTo avoid a self-induced recession comparable to the covid pandemic.
- JohnTHaller 2y agoConsidering Trump and Musk are actively killing the CFPB, which was put in place after the last time the 2008 great recession, it'll likely be sooner and worse than people think.
- emmelaich 2y agoRegarding point 3 the major point of reducing the civil service is that the service they're providing is not required or can be done far more efficiently with the private sector. You can say this claim will be wrong but it's odd at the very least to ignore it.
- ben_w 2y agoThey appear to be interested in monetary flow, for which such questions are irrelevant. Even if the top level suggestion of 2 trillion eliminated fell entirely on people providing zero economic output (i.e. the cuts consisted of completely eliminating social security and all military/veteran pensions), and thus the private sector has no desire to absorb them at step 1, and consequently 2 and 3 didn't apply at all, the private sector still looses that much in revenue.
- deleted 2y ago[deleted]
- evanjrowley 2y agoThe US federal government had a lot of money going into people and activities that were contrary to Republican political values. Finding new structures through which government money can flow is just as much of a goal as removing the unwanted ones. The result should be a government that does valuable things for the American people. For USAID, the Department of Education, and others, their value proposition has been weakened by outsize expenditures that both increased bureaucracy and pushed socio-political agendas. To your last point, the difference between private sector debt and federal government debt is the former has to pay it off or face consequences, while the latter never has to pay it and can simply print more money. Rather than taxing the rich, such a nation can simply expand the market for its own currency via decades of imperialist strategy. It is what it is. Anyway, exactly how much money you or I think the government should be printing per day doesn't change the fact that easy money leads to frivolous spending. "Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times" Who exactly would need 1.5x the $ to absorb these federal workers into the private sector? I think you have it backwards. With less competition from the federal government in the labor market, the private sector can now scoop up ex-federal talent for 2/3 of what they'd normally pay. Wasteful spending in the private sector looks like yachts, lavish events, and mansions. In the government, wasteful spending often looks like perfection. Taking information security as an example, the private industry pushed for the NIST CSF because it was more efficient than the government's NIST RMF / SP 800-53. While the latter is more comprehensive, you end up with wasteful excesses like network printers needing FIPS 199 moderate risk control baselines. Cuts to the managerial class, as has been advocated by Republicans, will reduce these excesses and push people into career paths that produce actual value. If it backfires and leads to an economic downturn, then fine, because I'm OK with property prices going down in one of the most expensive areas in the whole country.
- threatofrain 2y ago> the difference between private sector debt and federal government debt is the former has to pay it off or face consequences Absolutely not true. There are nation strategy-class companies. Whether or not the companies that have been bailed out are in that class is another matter, but it'd be stupid to think that a company should die just because the unfree market said so. That's certainly not how the Chinese have been playing this game.