This Time Is Different

A chart from EPI via Jared Bernstein:

These raw numbers of public sector losses get a lot of attention, but the part I wanted to highlight is the private-sector jobs multiplier from public sector jobs.  I quote at length here because Heidi and Josh provide an excellent explanation of this overlooked point.

However, even that 1.1 million public-sector jobs gap leaves out an important component: public-sector job cuts also cause job loss in the private sector, for a couple of reasons. First, public-sector workers need to use inputs into their work that are sourced by the private sector. Firefighters need trucks and hoses, police officers need cars and radios, and teachers need books and desks. When public-sector jobs are lost, it stands to reason that the inputs into these jobs will fall as well, and indeed research shows that for every public-sector job lost, roughly 0.43 supplier jobs are lost.
Second, the economic “multiplier” of state and local spending (not including transfer payments) is large – around 1.24. This means that for every dollar cut in salary and supplies of public-sector workers, another $0.24 is lost in purchasing power throughout the rest of the economy. Teachers and firefighters stop going to restaurants and buying cars if they’re laid off, which reduces demand for waitstaff and autoworkers and so on. Add these two influences together (supplier jobs and jobs supported by this multiplier impact) and roughly 0.67 private sector jobs are lost for every public sector job cut.   This means that the public sector being down 1.1 million jobs has likely cost the private sector 751,000 jobs (1.1 million*0.67). [my bold]
Further, it should be noted that this 0.67 figure only accounts for private-sector job loss that is due to direct public-sector job loss.

The public sector job losses have been a major drain on the economy.  It is important to note that most of the benefit in cutting government spending and not raising taxes, or, in the case of states like Ohio and Wisconsin, cutting government spending and cutting taxes, goes to the wealthy, who really don't need that additional money.  There is something very stupid in that, in my opinion.