Democrats’ Economic Policies Prevent Job Recovery

Study Shows Stimulus Spending Caused Private Sector Job Loss in NC

Raleigh, N.C. – A recently released study conducted by Arduin, Laffer, and Moore Econometrics shows that federal spending in North Carolina under the American Recovery and Reinvestment Act of 2009 (ARRA) will actually cause a loss of between 51,100 and 66,900 jobs in North Carolina.  The original rationale for the federal stimulus bill was that additional federal spending would create jobs; even the Obama Administration now acknowledges that has not occurred as they now say that federal spending has “saved” jobs from being lost.  The Arduin, Laffer, and Moore report directly contradicts both the original and current justifications.  Unemployment in North Carolina remains at historic high levels – nearly 11 percent – and has shown almost no change in several months.

“When government expenditures grow beyond the private sector’s ability to pay for it, economic growth suffers. Put simply, growth in government crowds out growth in the private sector. … The increased government expenditures will reduce private sector growth and increase overall unemployment…”  (“The Economic Impact of Federal Spending on State Economic Performance: A North Carolina Perspective,” Arduin, Laffer, and Moore Econometrics, July 2009)

Governor Perdue and legislative Democrats used ARRA funds to pay for ongoing state expenditures and have advanced no job creation strategy for North Carolina other than to justify state government borrowing and spending.   If the report’s conclusions are correct, private sector job growth will not recover so long as government spending continues to “crowd out” private investment.  And in future years, when federal dollars are no longer available, the state will again raise taxes to pay for the continuing high level of state government spending.

“Republicans have warned that higher levels of government spending, whether state or federal, would be harmful to the private sector and ultimately to the economy as a whole.  Government spending has never and will never create long term prosperity or economic recovery,” Senate Republican Leader Phil Berger (R-Rockingham) said.  “Now we see that this unprecedented spending by government is not only failing to create jobs but is actually costing jobs.  Governor Perdue and legislative Democrats have no plan for creating jobs in North Carolina.  North Carolina’s economy will not recover without jobs, and, ultimately, Governor Perdue cannot pass the buck to federal authorities to solve the problems facing our state.”

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