Ben Polak and Peter K. Schott are right:
It has become commonplace to contrast the American and European responses to the Great Recession, with stimulus in the former and austerity in the latter. European austerity has been at the level of member states and local governments — there is no meaningful federal government of Europe to provide either stimulus or austerity. But the United States has also seen unprecedented austerity at the level of state and local governments, and this austerity has slowed the job recovery.
Here is what government employment looks like since 2007: total, state, and local (from the Bureau of Labor Statistics).
Not only are the numbers of government employees moving in exactly the wrong direction, falling rather than rising in the midst of the Second Great Depression and therefore keeping unemployment much too high. They’re exacerbating, in the form of deteriorating local government services, the austerity being imposed on wages and working conditions by private employers.
This is austerity—American style.
