1. A whole slew of economists, including the people at Goldman Sachs, have now noticed that state public sector jobs are actually "jobs" and that if states cut lots of jobs it will tank the economy.
2. The same appears to be true on the federal level. Turns out federal jobs are actually "jobs" and losing them will drive up unemployment and deprive people of purchasing power and confidence.
3. One of the biggest drags on recovery has been the steady loss of public sector jobs at a rate much faster than the private sector can possibly replace. The net effect of this was to drive down Q4 recovery.
4. With "failed" stimulus funds exhausted and feds on track to make deep cuts, there is no way for states to close their budget gaps without massive layoffs and cuts in reimbursement rates for things like Medicare/Medicaide. Also a big surprise, these government programs support non-public sector jobs which will be lost if the states and the federal government scale back spending in the manner required to close the budget gap.
Wow. If only someone had seen this coming. Oh wait . . . some of us did. Mind you, the Dems did the lame-assist job in the universe defending this. Happily for the powers that be at Goldman Sachs and so forth, it appears that Dems and Republican leaders will combine to defeat the Tea Party demands for deeper cuts that could damage their interests too deeply. Only the poor will suffer.
On the plus side, they can keep watching Glenn Beck and voting Republican. Perhaps we can arrange a full-scale crash and burn for 2014. On the plus side, South America continues to enjoy a growth rate of about 9%. So if we go down, we won't take the world with us this time.