Kent Conrad Calls for Throwing Millions of People Out of Work

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Wednesday, 21 April 2010 05:08

That would have been an appropriate title for an article describing North Dakota Senator Kent Conrad's plan for sharp cuts in the budget deficit over the next four years. Conrad's plan would reduce the projected 2015 deficit by approximately 1.6 percentage points of GDP more than President Obama's budget. Since most projections still show the economy to be well below full employment levels of output by this year, the cuts in spending and higher taxes in Senator Conrad's plan will reduce the level of output. If we assume an average multiplier of 1, then output will be 1.6 percent lower in 2015 than would otherwise be the case. If employment falls by the same amount, then Senator Conrad's plan would throw roughly 2.3 million people out of work.

It is worth noting that our children will pay a substantial cost under Senator Conrad's deficit reduction scheme. He proposes especially large cuts for the Pell Grant program that helps children from moderate income families pay for college.

At one point, the article describes President Obama's plan to extend President Bush's tax cut for middle-income families and other tax measures as "expensive tax breaks." The more normal description in news stories is "tax breaks."