Up   |  February 03, 2013

Public vs. private contribution to economic growth

Up host Chris Hayes and his panel examine the role of government and private business in our current economic recovery and the numbers needed to return to full employment.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> went to break that government has been shrinking during this period of time, government spending . and i just want to show this chart about this private contribution to gdp and public contribution to gdp . i think it's important. what we've basically seen is retrenchment. so the private sector has been positive for much of the last 16 quarters, you know, and its contribution to gdp has been positive and for most of the last 16 quarters, the subpekter has had a negative contribution to gdp . and then the question becomes, okay, we have the cyclical problem, we have government retrenchment, there's this lack of demand. are we going to look at this economy looking this way for the next four years or are we going to have something that looks like a real recovery that had, you know, in the 1980s , that happened in the 1990s . and this line graph gives you a stark sense of what that would mean for full employment , right? if we have 208,000 jobs per month, which would be a good -- that's a fairly good, right? that's above what the last year was. we don't get the full employment until august of 2020 . if we have 321,000 jobs a month, we get there by 2016 and 472,000 jobs a month, which is a really robust job recovery, we get there may 2015 . you look at that and you think, man, we are far from employment and this recovery so far is not producing the number of jobs necessary to get us there.

>> and there have been some jobs that languished since december 2011 that president obama suggested. that's jobs act would create hundreds of thousands of jobs, but in addition, if we decided that full employment was our goal and we employed some of these people, i think that we would not have some of the deficit issues we have because these people would pay taxes. they're participants. instead, we're paying i don't know how many people unemployment extended to basically -- i won't say sit at home, but we're paying them not to be productive. given our failing infrastructure and any number of other things, if the federal government would increase its spending, which i know this makes the tea party look crazy, but if we would increase spending, i would argue that the rate of return on that spending would --

>> that first chart that you showed, probably the first line is one of the most defining charts of this weak recovery. other than the first few quarters, which we had the stimulus. and drn.

>> but the number doesn't matter.

>> but at a recovery, that 24% will be up or down or employ people it's going to go down.

>> we have to remember -- we have to remember --

>> we pushed stimulus for one period.

>> the downturn caused the deficit, not the other way around. the fact is, in terms of jobs, we're talking about the loss of jobs and the public sector , he would have added about 1.8 million jobs, so the jobs deficit in the public sector is enormous. no. if the private sector had grown enough to offset that, i think all of us would be happy. but the point is, the private sector has not done well. you look at the last jobs report, the one that just came out, we see that one of the things that everybody had hoped for was the growth of ek ports as a sourt of job creation . not theirs.

>> everyone in the world wants to be a net exporter.

>> only a government jobs . government spending is up 30%. it's largely transfer payments , not employment in government and that should go, flow through the economy and create employment in the private sector .

>> transfer payments would go down if we were able to do more job creation .

>> we had not spent the money on unemployment insurance , on --

>> we continue to spend it every year.

>> the fact is that our economy would she even weaker.

>> right. so i guess my question for you, ed, is why -- i understand why people are -- i sort of understand why people are concerned about the deficit or we're spending too much money. but i don't see -- no one i've seen makes the case why that's the thing of making the recovery sluggish. the best i've ever --

>> joe does.

>> okay. look --

>> there are two interest rates on the economy.

>> hold that thought. explain it when we come right back