Actually, The Reagan Recovery Was All About Big Government Spending

Public sector employment has fallen sharply in the wake of The Great Recession, which is markedly different from every other recession of the past 35 years, according to a new analysis from the Economic Policy Institute.

Government jobs held steady between December 2007, when the downturn began, and September 2009, when it officially ended. That was largely due to beefed up aid to state and local governments contained in the Obama administration’s $787 billion stimulus package. When that disappeared, so did more than 600,000 state and local teacher, police, firefighter and other public sector jobs, which added about a half percentage point to the overall unemployment rate.

Which president’s economic recovery benefited most from an increasing number of government jobs? Oddly enough, it was President Ronald Reagan, who successfully ran for re-election in 1984 by proclaiming it was “morning in America.” Reagan, running in a year when unemployment fell over a percentage point to 7.5 per cent, is generally (and incorrectly) remembered as the first conservative president to dramatically shrink the size and role of government.


This post was originally published by The Fiscal Times.