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GOP Spending Cuts Would Kill 700,000 Jobs
A new report says the Republican's proposed spending cuts would result in the destruction of 700,000 jobs through 2012.
The report by Moody's Analytics chief economist Mark Zandi claims the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year, according to a report in The Washington Post.
Republicans want to cut $61 billion in spending over the next seven months, slashing dozens of programs.
Republicans are dismissing this report, as well as a previous report with even more dire predictions, saying they are the product of the same flawed economic thinking that produced President Obama's $814 billion stimulus package, which was supposed to keep unemployment below 8%. Instead, the unemployment rate has hovered at or above 9% for nearly two years.
On Monday, Republicans were particularly critical of Zandi, who is a registered Democrat but advised Republican John McCain's 2008 presidential campaign. He later became one of the most influential advocates for government economic stimulus.
"The fact that a relentless cheerleader for the failed 'stimulus' - which the Democrats who run Washington claimed would keep unemployment below eight percent - refuses to understand that ending the spending binge will help the private sector create jobs is sad, but not surprising," said Michael Steel, a spokesman for House Speaker John A. Boehner.
Republican leaders say cutting government spending will create jobs by removing the fear of higher taxes from the minds of business owners and entrepreneurs. Democrats disagree, and so do at least two independent reports.