www.epi.org/content.cfm/webfeatures_snapshots_20060126
Sluggish private job growth indicates failure of tax cuts 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 spendingnot tax cutsare 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 20 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 spendingparticularly increased defense spendingin this period? Private-sector job growth from FY2001 to FY2006 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 1495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1325 million jobs in the private sector, for a total of 282 million jobs created by increased government spending. Increased mandatory government spendingwhich is not even included in these estimates or the accompanying chartwould 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.
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