Don't give me this Keynesian economics garbage: federal spending can never create more jobs than it destroys.
Past flurries of federal spending have been disasters, first, because they violate a major rule of economics: Every dollar of government spending must be raised through a dollar of taxation. Since government spending can only be done by taking tax dollars from citizens (or inflating the currency, which is worse), jobs created by the government are lost from the private sector.Take that, Nancy Pelosi.
1 comments:
Not strictly true.
In the short-term jobs are created, before people adjust their spending habits to reflect the taxes (_especially_ if its done through inflating the currency).
Second there are cases in which government investment pays off in the long-run. Interstate highways in a motorized society may be one of those things. The highway jobs in this new package may do that, but the cost-effectiveness of new roads is surely reduced as internal manufacturing grows steadily more insignificant.
The really big problem with Keynes is not the business about how many jobs are created, but WHAT SORT of jobs they are. The new jobs are jobs for people who consume, but the injured jobs are jobs for people who invest. Investment is the key to sustained growth.
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