I wrote once that “the government cannot create jobs”. The president has been saying that his programs have slowed job destruction in the country. Once he said that his programs would keep the unemployment rate under 10 percent. That was when it was 8.5 percent. Now that it is over 10 percent, the president is saying that things would be worse if his programs of “stimulus” and spending had not been implemented. Of course he is wrong. As I have written before, we keep ignoring the fact that no stimulus program has ever worked. This is because consumers and businesses do not change their consumption/investment behavior over some change that is temporary. So the money was used to reduce debt rather than to generate growth. If the president wanted to really create jobs, he would favor changes that were permanent that create jobs. However, he is doing just the opposite. The proposed budget contains $2 trillion in new taxes on households and businesses that are permanent unless changed by some future president and congress. What I am wondering is if we as a nation has ever increased taxes during a recession. The answer is yes. Franklin Roosevelt did it during the Great Depression. The result was to prolong the depression through the 1930s. This president who envisions himself as a new Roosevelt is following in his footsteps. Not only by raising taxes during an economic downturn, but also by declaring war on the banks to divert attention from his own disastrous policies.
However, the president has created jobs. First he has proposed to forgive student loans for those who choose to work for the government. That of course should increase the supply of those applying for government work. Second, and more directly, federal government employment has grown by 14.5 percent under this administration’s first two years.
Happy Birthday Frederic Bastiat
2 years ago