General Discussion
In reply to the discussion: So we're slashing more government jobs in a Depression [View all]BzaDem
(11,142 posts)intents and purposes fixed the amount of discretionary spending for the next 10 years.
So if we save 3 billion over 10 years with this proposal, then 3 billion would be spent elsewhere in the discretionary spending budget.
Furthermore, even if this somehow did affect aggregate demand, FDR did what he did when aggregate demand was dangerously low. Obama is doing so over a long 10-year period, where the vast majority of the attrition will be during a time when we are not in a liquidity trap. A time where money spent on X is indeed money that cannot be spent on Y, for which removing waste and duplication is a net plus.
And the idea that the economy would grow at 8% a year is a fantasy. That happened in the depression because unemployment was multiple times what it is now, and the economy contracted by one third. It is much, much easier to hit those numbers when you are 33% below potential output.
Your argument seems to be (and you can correct me if I'm wrong) that it never makes sense to cut waste and duplication. While that is indeed what Republicans accuse Democrats of believing (to great electoral effect), it is not an economically-sound argument. Both Keynes and FDR would be horrified that their work was being used to make that argument.