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Posted on 06/21/2011 11:07:03 AM PDT by Qbert
It was the British economist John Maynard Keynes who famously wrote that ideas, "both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else." Right now, I'm worried about the damage that might be done by one particularly wrong-headed idea: the notion that, in stark contrast to Keynes's teaching, government spending destroys jobs.
No, that's not a typo. House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." Think about that for a minute. The claim is that employment actually declines when federal spending rises. Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now.
[Snip]
The generic conservative view that government is "too big" in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?
One possible answer is that the taxes necessary to pay for the government spending destroy more jobs than the spending creates. That's a logical possibility, although it would require extremely inept choices of how to spend the money and how to raise the revenue. But tax-financed spending is not what's at issue today. The current debate is about deficit spending: raising spending without raising taxes.
[Snip]
In sum, you may view any particular public-spending program as wasteful, inefficient, leading to "big government" or objectionable on some other grounds. But if it's not financed with higher taxes, and if it doesn't drive up interest rates, it's hard to see how it can destroy jobs.
(Excerpt) Read more at online.wsj.com ...
Like what happened... in the mid-to-late 1990's?...
must be keeeeeeen-si-an.
These idiots are acting like we somehow have a lack of spending at the Federal and state levels. We are spending massively above the historical norm in percentage of GDP, and it is a literally boot on the neck of our economy. Whether paid for by debt or tax collections, it is a burden that is slowing the economy. This is inarguable.
No one is advocating spending zero. We need to refocus on the few things the federal government is supposed to do, cut a lot, and reform the entitlement programs so they are market driven.
Myth my ass!
Studying monkey love is a productive way to spend money in anybody’s book.
Common sense is not an abundant commodity on the academic level, if it was, this Princeton professor would deduce that in order to spend money, government has to take it from someone, and many times, that person is someone who actually creates a real job other than one paid for by someone else’s money. And that is how government expansion kills jobs. Simple enough for anyone except an academic.
Yep. And it’s as real as Bernie Maddoff’s “profits” all those years... until it all came crashing down the moment that people wanted their money.
I suspect the WSJ finds the biggest dolts it can to write the ‘liberal’ opposing editorials. They used to employ Thomas Frank for a weekly column.
“But if it’s not financed with higher taxes, and if it doesn’t drive up interest rates, it’s hard to see how it can destroy jobs.”
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The economic ignorance is breathtaking.
Regardless of whether government spending can be traced specifically to “higher taxes”, government programs always, always, ALWAYS are at the expense of removing money from the efficiencies of even a relatively free market, where the rigor of competition ASSURES proper, judicious and productive use.
Gosh, can ANYONE get a column in the WSJ?
If the G spends $10 on computers, that’s $10 taken by force from a free thinking economic actor, and given to a government-selected computer vendor. Said vendor must be a disadvantaged transvestite Eskimo female. The G. will pay $10 for $6 worth of inferior computers, and half the money will be stolen. Simple fact — it is a PHYSICAL IMPOSSIBILITY for the G. to spend a single penny that it did not already take from the private economy. Or it can print it. Either way, not good. See my tagline.
Beg to differ. Not all government spending is inefficient or counter-productive. Neither does all private spending generate new wealth.
On average private spending generates more wealth than public spending, but it is by no means ALWAYS the case.
Let's not get hyperbolic.
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Nothing is taken by force from anyone if the money spent was borrowed rather than taxed. And the $10 borrowed isn't going to hurt anybody.
Of course the cumulative effect of tens of trillions borrowed is well on the way to destroying our economy and possibly our society.
“Common sense is not an abundant commodity on the academic level...
Simple enough for anyone except an academic.”
I’ve always thought it had something to do with how jobs are “created” in academia. When the private sector wants to do anything, there is a maze of complexities involved (finding the right price for a product- not too high or too low, having the right number of workers to do the job- enough but not too many, factoring in regulations, taxes, future market conditions, etc.)
When academia wants to do anything, it’s simple: Raise tuition.
I was looking for “your” post.
This is exactly the answer -
government spending always always always takes wealth out of the inherent efficiencies of the free market and puts it into the inherently inefficient government sector.
Somebody should tell that twit that not everybody can work for the government.
If everybody worked for the local, state and federal government the tax rate would have to be over 100% to pay everyone and everything.
It is not the spending per se that is the culprit. It is the combination of (1)financing spending by borrowing and a concommitant devaluation of the currency, and (2)taxing the guts out of businesses and the productive elements of society to pay for the spending. Add in onerous, overbearing regulation/ enforcement, and you have the prescription that kills the goose that laid the golden egg.
Not hyperbole in the least.
The marketplace, allowed to function properly, is always a more efficient deployment vehicle for monetary resources. It is not even close.
You don’t have to believe me. Read up on The Austrain School.
Austrain = Austrian
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