Mitt Doesn't Understand the Jobs Report

After the jobs report yesterday, Mitt said it was example of how President Obama's policies have failed to work.  I disagree.  The data shows that Mitt's proposed policies will lead to increased unemployment.

Now 1st of all, the policies that Mr. Romney is criticizing were put in place during the last 3 quarters of 2009 and led to all the jobs that were created in 2010 and 2011.

2nd, you need to look at the detail of the jobs report to see that the private sector created 82,000 jobs in May.  The public sector declined 13,000 jobs to generate the disappointing headline number of 69,000 jobs.  This pattern has been consistent for the past year or two as the private sector has created jobs in response to the policy stimulation while the public sector has been cutting employment as revenues at the state and local level have declined.

This is why Mitt's proposed policy will lead to higher unemployment.  Cutting spending at the Federal Level quickly will reduce government staffing leading to more unemployed.  His tax cuts, if they are to result in a balanced budget, will lead to more cuts in employment.  I don't believe trickle down economics works anymore because anyone who receives these tax cuts will save the funds while those who do not have jobs anymore will be consuming less.  Now, Mitt's counter theory is that the rich folks savings will be invested in business and provide jobs.  But before anyone gets hired by those new businesses, there must be demand for the services provided which requires people to have jobs.  This can only work with a serious delay between time of tax cut and increase in employment.  Unemployment will go up as government workers lose their jobs until such time as the private sector develop needs for more workers.

I am also ignoring the difficulty in matching skills between the public and private sector.  In fact, there are many mismatches in skills between those the unemployed possess and those the private sector desires.  Look at the long term unemployed and the early retirees who cannot find a new position despite pounding the pavement of the private sector.