Good Government is a Myth Part 2b: Government Employment

This is titled part 2b, as my friend Chris Waner has written parts 1 and 2 on his blog The Free Exchange. Read his article “Government Employment” here. To summarize, Government cannot create wealth, it cannot create new jobs. 

one of the great myths about government is that it can employ people for the betterment of the economy or in this way help the economy through tough timesThe government cannot spend a single dollar which does not have some negative effect on the economy.

Many will read this and think it intellectual nonsense. You will say “ah, but what about FDR’s public works programs that pulled us out of the great depression?” You will reason that people at work- government contractors – are people putting money back into the economy. But let’s do a few thought exercises. 

If Government jobs are the answer, why not have all government jobs? If 100,000 new government jobs are going to aid the economy, would not everyone being employed by the government be even better? 

How will we pay these workers? Taxes? Where does tax money come from? Some other worker. 

Or we could print new money. Why is this a problem? it reduces the value of all the money already out there. 

Either way, we’re not solving any problems, we’re just transferring wealth. How do we solve the problem? 

The fact is that this recession is the best thing for the economy. The natural laws of free-market economics are in the process of correcting the current financial disaster, putting the unemployed in jobs that are actually needed in the economy, readjusting all the mal-investment, encouraging savings instead of run-away consumer debt. The medicine doesn’t necessarily taste good, nor does it work immediately, but it does begin working immediately, and, honestly, it’s the only thing that will actually fix the problem.