The GOP is embracing some very dangerous voodoo economics.
By Joshua Holland
March 28, 2011
Earlier this month, House Republicans laid out a perverse plan to lower working Americans’ wages, supposedly in a bid to get employers to hire more of them (PDF). One would be hard-pressed to find a better example of the “race to the bottom.”
Republican staffers on the Joint Economic Committee released the study in response to widespread criticism that the deep public sector cuts they’ve advocated threaten to derail an already anemic “recovery” — economist Mark Zandi estimated last month that if enacted, the spending cuts would cost the U.S. economy 700,000 jobs through 2012.
So, as Tim Fernholz and Jim Tankersley wrote in the National Journal, the GOP report “makes the party’s … case that fiscal consolidation (read: spending cuts) can spur immediate economic growth and reduce unemployment.”
The paper calls for cuts that are “large, credible, and politically difficult to reverse once made,” and offers a typical conservative fantasy about shuttering entire federal agencies. But topping the list of what should be on the Republicans’ chopping block is “decreasing the number and compensation of government workers,” which the staffers say will spur job creation because “a smaller government workforce increases the available supply of educated, skilled workers for private firms, thus lowering labor costs.”
“Labor costs,” of course mean “wages” – Americans’ paychecks. So, a central plank in the GOP’s economic recovery plan is to flood the market with yet more unemployed people in order to drive wages (which have stagnated for an extended period) further down.