Think about huge cuts in government right now. What really happens if that takes place?
If the cuts are made that need to be made thousands of government workers will be downsized. Combine this with what is happening at state and local levels and unemployment will hit 10% or more by this time next year.
Washington DC, the only recession-proof area in the US will be chaos. The housing prices, which have not dropped there will drop like a rock. Lobbyists, the best friends politicians will be out of work.
When you take 10-15, or 20% employment out of the biggest employer in the world, that’s a big hit to the economy. It will be offset by lower consumer spending, unemployment costs, and other offsets.
Obama certainly doesn’t want to be looking at 10% unemployment going into the elections. Republicans don’t want to be facing a tax increase to tide the country over until the big hit to government jobs is digested.
Just as this is a bad time to raise taxes, it’s a bad time to radically cut government jobs at the Federal level.
Shrinking government can’t be done quickly, just like growing it to ObamaSize wasn’t done overnight. It needs to phased so the economy can accommodate the demand to replacement jobs for those displaced government workers.
Obama says don’t call my bluff. If the Republicans want to call it, just go ahead and pass something that will cut government jobs radically between now and the 2012 election. See who gets the blame for that?Regardless of how much money you raise for your campaign, Mr. President, you will be a one-termer if unemployment is 10%. Let’s see you try to spin that to your favor.
Obama and his advisors know they can’t make big cuts to government spending right now. Republicans may not care about the carnage, but if they find a way to make big cuts, Obama will be gone in 2013.
