Unemployed people don’t pay taxes and tend to use government services, so obviously high unemployment creates a drain on the budget.
Many Democrats would like to see the deficit Super Committee’s forthcoming fiscal plan scored for its expected impact on economic growth. The idea is that if the Congressional Budget Office says the plan is a job killer, it won’t pass, and members will figure out how to make it economically neutral or better.
The Super Committee’s been cool to the idea so far, but one of its members, Rep. Chris Van Hollen (D-MD) has helpfully underscored why economic growth (or lack thereof) is such a key issue, even if all you care about are budget deficits.
“I asked CBO to estimate the size of the deficit if the economy were at full employment, and CBO’s response confirms that our weak economy is the major contributing factor, accounting for over one third of the projected deficit for fiscal year 2012,” Van Hollen said in a statement last night. “It’s clear that the fastest and most effective ways to reduce the short term deficit is to put Americans back to work.”
Here’s what Van Hollen needs to ask the CBO. If the government payed the wages for all the unemployed, how much less than a third of the budget deficit would be eradicated? In other words, if the government created the jobs that private industry is not creating, how much better off would we be?
Just ask the question and get the data. I know that John Boehner isn’t going to listen, but the rest of us are interested.
