Federal, state and local governments now employ 500,000 fewer workers than they did on the eve of the recession in 200
Federal, state and local governments now employ 500,000 fewer workers than they did on the eve of the recession in 2007, the longest and deepest decline in total government employment since the aftermath of World War II.
While federal spending remained above the historical trend until earlier this year, scheduled cuts over the next two years would push government spending well below the trend.
“History shows that discretionary fiscal policy often helps to support a recovery,” Janet Yellen, vice chairwoman of the Federal Reserve, said in a recent speech. “Discretionary fiscal policy this time has actually acted to restrain the recovery.”
She added: “I expect that discretionary fiscal policy will continue to be a headwind for the recovery for some time, instead of the tail wind it has been in the past.”