01/30/2010 (11:17 am)
Yesterday Democrats went into a screeching frenzy of glee when Obama mouthed a few Democrat talking points at a Republican Congressional retreat. The sum of the talk was, “Let’s pretend that my hard-left policies and bullying tactics are really moderate, and you guys are really, really naughty for not bending over when I say ‘Bend over.’ Now lets create jobs together.”
I’ve been listening to this blather about government job creation for more than a year, and it’s worn me down. The Republicans are not responding properly at all. The fact that the government’s job creation statistics are fictional does not address the core fallacy. The point is not just that they’re frequently lying when they say the money has created a job, nor that there’s no way to say when a job has been “saved”; it’s that a job created by government spending is always, always, a job that would have been created by private spending if the government had not taken the money. Even if they can show a policeman in Weewau, WI who got a job based on a government grant, the fact is that a machinist in Illinois can’t find a job because the money that would have started a business there was yanked by the government and sent to Wisconsin. Government spending stimulates nothing. It just makes the government bigger, and the private sector smaller.
So, today, while the big news is Obama seducing Republicans to go along with yet another expansion of government, let’s review just how silly Keynesian economic theory really is — the theory that says government borrowing and spending can stimulate an economy. I wrote about this almost exactly a year ago, and here’s the video again — Dan Mitchell from the Cato Institute explaining why Keynesian economics fails to stimulate economies. You might want to go back and read last year’s version, since I did have a few minor quibbles with the video. And then, you get to see a second video by the same guy, explaining why the administration is so interested in concocting a second stimulus when it’s clear that the first stimulus did nothing. Enjoy.
2 Comments »
Comment by anna
Get this – this is a true story.
I work as a consulting engineer at a medium size design firm. Therefore a lot of the “stimulus” money has gone to shovel-ready construction jobs which means work for us. Every time we work on a job with ARRA money (the American Recovery & Reinvestment Act aka “Stimulus”) the project managers have to get a bunch of statistics together to send to the government, and one of those stats is how many people will be working on the job. Every one of those counts as a job “created or saved”. Therefore, if I work on 2 stimulus jobs that counts as 2 jobs created or saved, even though I never lost my job and was working before the stimulus took effect.
makes me want to barf.
Comment by suek
I’m not sure my info is correct, but as I understand it, the Stimulus money can only go to companies that hire union workers(if it’s a field where there _is_ a union). If that’s true, then considering that only 7-8% of American workers are union members, only 7-8% of the working population can benefit by the stimulus. It’s also going to slow things down considerably, and of course, it’s a nice bennie for the unions (it’s main intent, imo).