My friend "BC" pinged me with some interesting employment stats regarding the state of Oregon that apply in varying degrees to every state in the union, and arguably most countries in the world.



"BC" Writes ....



OR total payroll employment has not grown in 11 years, which is not unlike most of the rest of the US.



However, adjusting for OR population growth, payroll employment is back to the level of the early '90s.



But it's worse than that. Private payrolls are back to the level of '97, and adjusting for population there are fewer private payroll jobs per capita than the late '80s to early '90s.



And gov't payrolls over the past two decades have grown at twice the population/labor force growth rate.



Total OR employment is back to the levels of '04-'05 and '99-'00; however, adjusted for population/labor force growth, employment is down 10% from '00 and down 3.1% from '90.



Now that local and state employment is necessarily being cut along with no growth or continuing contraction of private payrolls, and were OR gov't payrolls to converge with the differential rate of growth to private payrolls and population/labor force growth, OR gov't payrolls will be cut by 30-31% over the coming decade, implying further a similar cut in local and state budgets.



Extrapolating further at the trend rate of population growth, the per-capita reduction in gov't payrolls and spending will be around 40%, matching what is likely to be the same decline per capita in oil production/consumption, bank lending (and overall value of US assets), and US GDP (and states' GSP) that otherwise would have occurred from the '00 peak rate had the long-term trend rate occurred.



Japan, parts of continental EU, and the UK and Ireland are moving, or soon inevitably will move, in this direction of public spending cuts with the predictable implications for household incomes, increasing household economic hardship, and social discontent/unrest. (Gov't spending cuts will not have a sustained stimulative effect on the private sector, however, as the gov't spending cuts are occurring because the private sector is not growing or contracting, and the cost of existing gov't as a share of the private sector will not fall much, if at all, especially if taxes are raised and net interest per receipts and per private GDP continue high or increase.)



Needless to say, the consequences for such a decline in overall private and public economic (or uneconomic) activity will be severe, life-changing, and consciousness-altering.

Debt Overhang and Civilian Employment Population Ratio

Pension System is Bankrupt

UK Leads the Way with Massive Public Sector Cuts

The British government on Wednesday unveiled the country’s steepest public spending cuts in more than 60 years, reducing costs in government departments by an average of 19 percent, sharply curtailing welfare benefits, raising the retirement age to 66 by 2020 and eliminating hundreds of thousands of public sector jobs in an effort to bring down the bloated budget deficit.



“There’s a growing acceptance and public awareness that this is necessary, that these measures are needed,” Helen Cleary, deputy political director for the Ipsos Mori polltakers, said in an interview. “But I don’t think people will really understand what it all means until the cuts start to bite.”



Mr. Osborne said that 490,000 public sector jobs would be lost over the next four years, some to attrition. At the same time, payments to the long-term unemployed who fail to seek jobs would be cut, he said, saving $11 billion a year. Additionally, he said, a new 12-month limit would be imposed on long-term jobless benefits, and that measures would be taken to curb benefit fraud.



Britain has about six million public-sector jobs, about one fifth of all jobs in the economy, according to the Office for National Statistics.

Nobel Prize Winning Fools

Economist Joseph E. Stiglitz argued that the government’s plan was “a gamble with almost no potential upside” and that it would lead to lower growth, lower demand, lower tax revenues, a deterioration of skills among the unemployed and an even higher national debt.



“We cannot afford austerity now,” he wrote in The Guardian newspaper. “Austerity converts downturns into recessions, recessions into depressions. The confidence fairy that the austerity advocates claim will appear almost never does, partly because the downturns mean that deficit reductions are always smaller than was hoped.”

Unavoidable Path

The consequences for such a decline in overall private and public economic (or uneconomic) activity will be severe, life-changing, and consciousness-altering.

We have reaped the rewards of putting off the inevitable once too many times already. The Housing bubble and debt collapse is proof enough of what happens.



of putting off the inevitable once too many times already. The Housing bubble and debt collapse is proof enough of what happens.

Greece shows what happens when government spending runs amuck



Japan has proven that all you get from Keynesian and Monetarist spending is more debt. Japan has squandered decades of trade surpluses building bridges to nowhere. As soon as interest rates in Japan turn up Japan will be bankrupt.

