Wednesday, December 12, 2012

Government is a Taker, Not a Maker

Robert Samuelson has written an insightful article, Flat Earth Economics, wherein he addresses the ideological tug-of-war over whether government creates jobs or not.

He explains that, yes, government creates jobs, but government jobs do not expand the economic pie.  Rather, they are a direct drag on the economy (stick with me, progressives). They don’t create anything. I am not disrespecting teachers and firefighters. We need them, but let’s compare: A coal miner introduces something brand new to an economy that did not exist before. Coal from the ground is a creation of wealth, as is something coming off of an assembly line, or a haircut.

Here is the distinction: A factory hires workers to assemble things on the line and push them out the door. Those workers make money directly for the company. But the factory also has secretaries, payroll personnel, support staff, janitors and others not directly involved in making the product that produces revenue for the company. Those support positions are a net drain, but they are a necessary cost, because manufacturing could not continue without them. The same goes with government jobs. They don’t expand the economy, but they do serve a purpose.

We need firefighters, police and teachers, but we’ve got to keep these government ‘support positions’ as lean as possible, because we are taking money from the private sector to pay for them.

Samuelson wrote the article in response to yet another economically-ignorant missive from the New York Times, where they engage in the fairy tale than government spending is new spending:
What the Times omits is the money to support all these government jobs. It must come from somewhere -- generally, taxes or loans (bonds, bills). But if the people whose money is taken via taxation or borrowing had kept the money, they would have spent most or all of it on something -- and that spending would have boosted employment.
Samuelson continues...
public-sector employment grows only when government claims some private-sector income to pay its workers. Government is not creating jobs. It's substituting public-sector workers for private-sector workers.
If you're one of those lefties who still doesn't get it, ask yourself this question:  Why doesn't Government solve the unemployment problem by hiring everyone who is unemployed?

18 comments:

Ducky's here said...

I get it. But it isn't the left who wants to keep hiring stinking cops (useless ex military who are otherwise unemployable).

It isn't the left who want useless S.W.A.T. teams established in every backwater town in America but the militarization of police is good business for the defense industry.
Who says it doesn't bump GDP?

Fire prevention methods have reduced the number of fires by quanta. But you won't find any reduction in personnel.
Hell, one town actually did locally and there was a rash of fires. The shakedown artists were rehired and the fires miraculously stopped.

The so called "public safety" sectors steal anything that isn't nailed down but there are so many myths about these supposed "heroes" that we'll never reduce staffing.

Always On Watch said...

we are taking money from the private sector to pay for [government jobs]

Do conservatives in the employ of the government understand that their jobs are funded by taxpayers?

I know lots of government workers who are conservatives, yet they brag, "My employer pays x% of my health insurance premium." Just an example of the inconsistency I see going on -- even among conservatives.

We are rapidly reaching the point -- indeed, may already have reached the point -- that the tax base is too small to support "the takers," the takers of all ilks.

Bunkerville said...

And now 17 dem senators are against the medical device tax because it will cost jobs. So they really do get it. Point A leads to point B but they refuse to accept it.

conservativesonfire said...

Daily we get closer to the day when one taxpayer will be supportin one person who either is emplyeed by government, is recieving Social Security, or is living off of the safety net. It can not work ondefinitely!

Jersey McJones said...

Teachers don't make anything?

Roads do not create the way for businesses and housing?

Research creates nothing?

This is simplistic silliness.

JMJ

-FJ said...

I get it. But it isn't the left who wants to keep hiring stinking cops

No the Left are the guys who unionize the useless cops (ie - TSA) and ensure they all get a "living wage" that's 2x a non-union machinist's. And the carbon and food police were Right wing idea's? Ban 20 oz. soft drinks! Who knew?

Silverfiddle said...

No Jersey, your simple-minded response is silliness.

I guess this is lost on the economically ignorant.

Jersey McJones said...

LOL!

Really, Silver, you really don't understand the economic value of public education?

Gee, you must be some kind of genius economist! LOL!

JMJ

Ducky's here said...

I have to disagree, Farmer. It was rushed into place in the general panic after 9/11 under the Chucklenuts administration so the right has to take a measure of responsibility.

As a result of the 9/11 panic we have the "anti terror" grants to backwater police departments. Every small town needs the expense of a S.W.A.T. team, right? The money spent on equipment and staffing for nothing useful is repugnant.

We also have the NYPD as another exhibit. Their expensive Muslim surveillance team has uncovered --- zero. That's right, zero and it gets very little coverage outside largely but not exclusively left wing sources.
Then we have the same NYPD keeping everyone safe with stop and frisk which has drawn bipartisan condemnation but we can't do anything about these ex soldier boys running around out of control.

They are the worst but public employees in general need to be slammed and slammed hard. Unions have been decimated in the U.S. and all these folks did was sit on their hands and grab what they could. Now these fucking dirt balls want to claim they are the tip of the spear of the labor movement.
Disgusting.

If you have a way of getting the absolutely useless (what a win that was for our enemies) please publish. Really, you've got widespread support.

Silverfiddle said...

Jersey,

Go back and read what I have written. Your buffoonish comments tell me you have not. I have stated that government provides valuable and needed services, to include education.

And then, answer the final question: Why doesn't government solve all economic and unemployment problems by hiring everyone who is unemployed

Leticia said...

All I can add to your post is, Spot-on!

And I am afraid many are going to disagree with you and start with the name-calling. Hang on to your coat-tails.

Thersites said...

The DEMOCRATS insisted that TSA be federal union workers, NOT the Republicans, duckman. See here. They started by insisting that the TSA cops be "civil servants"... and then "grew" their paychecks from there.

skudrunner said...

Duck,

You have an argument that is very true about unleashing government waste. Small towns with Armored personnel carriers so they can haul around their four cops.

Your statement " Unions have been decimated in the U.S." should be unions are no longer needed for most workers". The Michigan right to work ruckus is not about workers rights or protecting workers, it is about Union control of those workers and giving workers a choice, not something favorable to Unions.

The current excuse for a president praises unions, who supported him, and attacks small business with his "make um pay" politics.

Finntann said...

@I get it. But it isn't the left who wants to keep hiring stinking cops (useless ex military who are otherwise unemployable).

Where are you getting your numbers from Ducky?

I've been poking around trying to find studies and statistics on ex-military cops and am coming up with numbers of between 10-20%.

I'd also like to know what you think "ex-military" is?

There are a lot of veterans... not all of whom I would bestow the title of military professional upon.

There are significant numbers of 1 term military personnel who are denied reenlistment due to a variety of reasons generally and generically termed "non-adaptability to military life".

I think you do a disservice to many of our veterans by stereotyping "ex military who are otherwise unemployable" and there are few career military I would term "unemployable", regardless of what their specialty was.

Cheers!

Jersey McJones said...

Silver,

You just don't understand what today's American liberal and progressive people want, let alone what many things the broader public have in common with them.

They don't want total control over the economy. That's just silly and ridiculous.

I have a pretty good grasp of economics, and rights, and the constitution, and such (though occasionally I'll get confused about it all, like everyone else), and so when I look at the things the government does, I look at them carefully.

When I hear people saying "the government doesn't create jobs" or it "doesn't make anything," I think, "What a simplistic way of seeing how things get created and/or made."

JMJ

Jersey McJones said...

Eh, maybe it's the holidays, Les. ;)

JMJ

FreeThinke said...

Government salaries are paid by us TAXPAYERS.

Uncle SAM has been transformed by Marxian-Socialist-Liberal-Progressive-Statist policies into a monstrous VAMPIRE.

What's going to happen when there are more government drones than hard-working taxpayers?

The answer should be obvious, unless your mind has been poisoned by the seductive insanity of Leftist Orthodoxy, which has always insisted that black is white, up is down, north is south, east is west, and bad is good, etc.

More and more the concept of going underground -- living outside the box, as it were -- is becoming more and more attractive.

If you can't BEAT the bastard,
It's better to CHEAT the bastard.


The Gypsies my have had the right idea all along.

Let's have a resurgence of Romany Roverism.

Paint your wagon, get rolling, and stay on the move.

~ FreeThinke

Silverfiddle said...

Yeah, Jersey, I knew you couldn't answer the mail.

Check and mate.