Wednesday, February 07, 2007

Reaction to Granholm's Plan

Gov. Granholm delivered a powerful State of the State address last night. There wasn't anything I heard I didn't like. Her plan to turn Michigan around has lots of vision and innovation, but most of all it was fair and balanced. If you missed the speech, I recommend you click the link and read it. If you want reactions, the Conservative Media has some thoughts, as well as the bloggers at Michigan Liberal, and I'm sure as the day progresses other Michigan bloggers will be posting their thoughts as well (check out the sidebar).

I couldn't let one reaction pass by without commenting on it though. This is from the Freep:
State Sen. Nancy Cassis, R-Novi, called Granholm's agenda ambitious but lacking in specifics.

"Where we can agree, we'll work hard and we'll work together," Cassis said. "I want to know. Show us the money. It seems like a big price tag. Government doesn't create jobs, the private sector does." [emphasis added]
That's not what this recent report from the Economic Policy Institute indicates:
Changes in tax law since 2001 reduced federal government revenue by $870 billion through September 2005. Supporters of these tax cuts have touted them as great contributors to growth in jobs and pay. But, in reality, private-sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending—not tax cuts—are responsible for the jobs created in the past five years.

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?


Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001. [emphasis added]
Cassis might want to check her facts before she makes statements to the media or risk being perceived as a naysayer.

UPDATE: Here's a little related reading from Media Mouse: $6.2 Million Awarded to Companies in West Michigan for Military Work in January.

6 comments:

Kvatch said...

Stats like that make me thing that rather than having a 'Military Industrial Complex' we may soon be a 'Military Industrial Nation'.

Have to think on that a bit.

Lew Scannon said...

Isn't the private sector the people who have been outsourcing all of our jobs in the first place?

Kathy said...

Kvatch, "soon?"

Lew, you're right, and the ones that aren't outsourced are in service industries that tend to pay less.

Anonymous said...

If you remember your history you should know that boosting the economy through increased government spending is a false boost that only lasts as long as the government keeps spending more money than it has. True growth comes from the private sector from private investment and business growth. Boosts to the economy from increased spending are always followed by a major recession when the money runs out.

Anonymous said...

Just great, Bush keeps spending and spending and spending. We'll have him to thank when the shit hits the fan and our economy tanks. The man is worthless and should be impeached.

Anonymous said...

Should have said when our economy tanks even more than it already has (except for the rich people).