Welcome to the anti-stimulus

The good news: The private sector gained 64,000 jobs in September. The bad news? The public sector lost 159,000. And they weren't all census jobs, either. Local governments fired 76,000 workers. In other words, this is the first jobs report in recent months that isn't driven by census layoffs. If there were no census jobs at all, the report would still be negative.

In other words, welcome to the anti-stimulus.

The government is now impeding an economic recovery. But it's not for the reasons you often hear. It's not because of debt or because of taxes. Nor has it scared the private sector into timidity. It's because, at the state and local level, it's firing people. There are more than 14 million Americans looking for work right now -- to say nothing of the 9.5 million who have been forced into part-time jobs when they want, and need, full-time work -- and the government just added 159,000 more to the pool. Consider this: If we only counted private-sector jobs, we'd have had positive jobs reports for the last nine months. As it is, public-sector losses have wiped out private-sector gains for the past four months.

It doesn't need to be like this. The government can't make the private sector invest. They can't demand that Wal-Mart start hiring. They can offer incentives, and tax breaks, and encouragement, but that's it. The same cannot be said when it comes to public sector jobs. The government can, if it's willing to run deficits, keep those workers employed. But Senate Republicans, alongside some conservative Democrats, have decided to make the government pro-cyclical: Rather than fighting the downturn in the business cycle, the government is now accelerating it.

And don't ignore the effect this has on private businesses. They're not going to hire new workers or invest in more capacity if jobs aren't coming back, because without jobs, there's no demand. But because the federal government has decided against backing up state and local governments, the bleeding continues, and that scares businesses away from investing in recovery. We create the stimulus that helped the economy survive 2008 and 2009, and we've created the anti-stimulus that's keeping it from recovering in 2010.