Thursday, September 01, 2011

If Government Creates Jobs, What Jobs Would They Create?

The President is going to make a big speech about Congress setting aside their differences and taking action to create jobs in our country. I generally agree, in terms of economics, that the Government does not create jobs. There is no amount of legislation that will create a job. But, if the Government were to create jobs, they are not the kinds of jobs they are attempting to create. So, what jobs can the feds create?

The Government cannot simply will manufacturing jobs into existence by passing a law. If people are not buying products, there is no point manufacturing them. If we are not exporting products, there is no point manufacturing them.

The Government at this point cannot spur the service industry. With so many unemployed and wage-cut workers out there, people are choosing to cut back on expenses as much as possible. This includes dining out, entertainment, shopping, etc...

If the Government could create jobs, they would be related to the core function of Government. One such core function is maintaining a military. They could step up efforts to recruit new soldiers. Some really nice pay raises and benefits packages could allure more people to enlist. Not only do they serve their country, they learn valuable skills that make them an asset to the workforce after their enlistment ends. Instead, Government is cutting the military budget.

The Government is also responsible for dispensing justice. The judiciary is swamped with litigation and criminal cases. The Feds could increase the number of courts to expedite justice. They would hire more judges to hear more cases, which in turn would mean that attorneys would have more billable hours, there would be more court reporters, more stenographers, more bailiffs, more secretaries, more of everything judicial. The great thing about this is that legal work is not cheap. The Feds would be liberating a bunch of money to flow through the economy wherever courts are located. Unfortunately, there are plenty of empty benches with no chance of being filled during the current political stalemate. Creating more courts would only result in more empty courts.

The Government is also responsible for things like Interstate highways and operating post offices. So, theoretically, the Federal Government could create more jobs, if those jobs are within its core functions. Outside of that, you can lead a horse to water, and so on.

Unfortunately, they cannot even create those types of jobs effectively. Every paycheck the Federal Government provides is with borrowed money. Every social security check is with borrowed money. Every road project, post office, courthouse, and federal building is running on borrowed money. This is problematic because they are spending everything they take from us, and spending some more that we haven't earned yet.

So, even if the Federal Government were to create jobs that are a part of its core functions as I have suggested, they would be taking money out of the economy and putting it back in. It keeps people busy, which I suppose is a good thing to distract them from realizing that we aren't prospering.

I don't expect that whatever "jobs program" is proposed next week will have a lasting effect. In fact, I'd recommend the Congress take some extra time off, which would have a much more beneficial effect on the economy. All they will accomplish is to freak people out more with additional laws and spending, achieving the opposite effect of what they intended, once the initial cash infusion is spent.
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