We are in an economic slowdown at the same time we're experiencing rising prices of essentials such as food and transportation. Of course, non-essentials are going up, too. But it's easier to adjust to those price increases by cutting back.
As we tighten our belts and adjust to making what we have left go further, it is natural to expect our government agencies to do the same. It is politically popular to talk about "eliminating waste and unnecessary spending." Unfortunately, in the real world those cuts rarely get applied to extravagant toilets, etc. Instead they translate into job losses and reduction of services to the public.
When we insist our government agencies reduce spending, we don't really want people to lose their jobs. We just want lower taxes. Sadly, we cannot eat our cake and have it still.
When any organization or agency cuts jobs, there are going to be more people competing for the jobs that remain. Unemployment rises. Even if you believe your job is secure, the prevailing job market has a dampening effect on wages. This can lead to a downward economic spiral as people cut back on spending to adjust.
In the United States the federal government is the largest single employer. When you add to those federal jobs all the jobs of the various states and municipalities, you can see that governmental cuts have a big impact on overall unemployment rates. Those taxes you pay may hurt, but lower wages and even unemployment hurt still more. Keep that in mind the next time you look at your paycheck stub.
That's Wade's two cents.
Wade Houston
June 27, 2008
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