Partly because – contrary to what you hear – government employment continues to shrink: down 14,000 jobs in January, atop the more than 200,000 net lost jobs in the government sector in 2010. These jobs mostly come from state and local governments, the governments that have grown fastest over the past generation. With stimulus funds running out and little prospect of renewal, we should expect more government-sector layoffs in 2011 as states balance their budgets. Even California will have to follow the trend.
It will be a great irony of our time if the first Obama administration – so universally condemned by conservatives as a socialist, statist binge – turns out to be an era of streamlining and cutback in a bloated local government sector.