Government Spending Doesn’t Create Jobs
Uploaded by catoinstitutevideo on Sep 7, 2011
In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.
Video produced by Caleb Brown and Austin Bragg.
President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear Mr. President,
I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.
I don’t understand why people think that big government is the answer for everything when what the federal government should do is get out of the way. Cutting taxes and regulations would help us get out of the recession!!
by Daniel J. Mitchell (Also carried on his blog.)
Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.
Added to cato.org on March 13, 2012
This article appeared in U.S. News & World Report on March 13, 2012
The Minneapolis Federal Reserve Bank has a very useful interactive website that allows anybody to compare recessions and recoveries during the post-World War II era. It takes only a couple of clicks to complete the exercise, and does not reflect well on the current occupant of the White House—as you can see at this link.
This does not mean that Obama caused the economic downturn. That was the result of policies that were implemented during the Bush years (though the current president was a big supporter of the Fannie Mae and Freddie Mac subsidies that played such a big role in the financial crisis). Indeed, the recession officially began in December 2007, more than one year before Obama’s inauguration.
Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy.
But we can hold the president at least partially responsible for an extraordinarily weak and slow recovery. It’s been nearly three years since the recession officially ended in June 2009, yet jobs are still well below their pre-recession levels. And overall economic output, or gross domestic product, has just now finally gotten back to where it was when the downturn began.
This is an anemic record. Especially since an economy normally enjoys a strong bounce when coming out of a deep recession.
The problem is that Obama has tried all the wrong policies. He tried a big-spending Keynesian package that was supposed to be a “stimulus,” butthat’s the same failed approach that Bush tried in 2008, the same failed approach that Japan tried in the 1990s, and the same failed approach that Hoover and Roosevelt tried in the 1930s. Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy.
The president also has continuously expanded subsidies for unemployment, even though academic scholars (and even left-wing economists) all agree that such policies cause more joblessness.
And now he’s demanding higher tax rates, holding a Sword of Damocles over entrepreneurs, investors, and small business owners.
The nation recently endured eight years of a big-spending interventionist in the White House. The problem with Obama is that he promised hope and change, but he’s continuing the failed statist policies of his predecessor.
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, firstname.lastname@example.org