So Paul Ryan is officially riding shotgun with Mitt Romney, and we can get down to the business of vetting the issues (and the ugly ads) with each party’s ticket now a lock. (Sorry Ron Paul … but I’m going out on a limb and calling the primary for Romney.)
That means a big focus on jobs and the economy, right?
Well, maybe not.
You see, now that Ryan and his “path to prosperity” budget are front and center this is no longer a clear choice between the sitting president and his jobs strategy and the GOP vision of how to fix the economy. These days we are veering more away from “the jobs question” and more towards “the spending question.”
Particularly, Social Security and Medicare reforms are at play — and to a lesser extent, the quantity of government jobs and the quality of taxation.
A Gallup poll less than two weeks ago showed the top issue remains the employment picture … but next in line — and close behind in the polling were — “reducing corruption in the federal government” and “reducing the federal budget deficit.”
Here’s the lineup.
As you can see, we are no longer clearly in the territory of economics and job creation. It seems reasonable that a portion of voters could actually make their decision based wholly on government spending — regardless of which candidate is “better” for the economy.
The link between jobs and spending is very firm, of course. Consider one of the many charts floating around that shows the drop-off in government employment lately.
Some say this is a deep rollback of government that not only hurts services the American people have come to expect and rely on, but that the timing couldn’t be worse. The job cuts have significantly added to unemployment, and in tough times many think the services from government agencies are needed now more than ever.
Not so fast, say the critics. Take this analysis from Mish Shedlock and his blog Global Economic Trend Analysis.
“The growth in government jobs is not sustainable nor is there any genuine excuse for it other than political pandering and vote-buying operations.”
In short, the government had grown too big too fast — and it’s overdue for a contraction in both spending and payrolls. Look at Mish’s chart here for an example of how government jobs have grown at a much more rapid pace than private jobs in the past three decades.
So what does all this mean for November? Simply put, that the tenor of political conversations will be moving markedly away from how to fix the economy and toward how to fix the federal government’s spending problem.
The issues are indeed tied, but serious spending cuts right now could significantly curtail job growth — even if they are in the best interest of the long-term stability of Uncle Sam’s budget.
It will be interesting to see what voters decide. A year ago it seemed highly unlikely that the American people would care about anything other than economic growth plans come Election Day. But now, it is very likely that a portion of the electorate might care far more about spending these days.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.