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Wednesday, December 9, 2009

The Myth Of Government As Private Sector Job Creator

The myth of the government as 'job creator' is nonsense. Government can only consume wealth, not create it, and government should only consume the wealth necessary to fund services that the private sector has no incentive to perform, nothing more.

If governments could create wealth, they wouldn't need taxes. Governments need taxes because governments are a net drain on the economy. After all, what does government have to contribute to the economy, other than *money that was already in the hands of the people to begin with*??

Government cannot take taxes from the people and then return that money into the economy in a more potent state. Think about it. If you had a corn farm and your neighbor was hungry for corn, would you hire a government worker to take a bushel of your corn to Washington in taxes and then bring the corn back to your neighbor? Of course not. That would be a completely inefficient way to create the relationships between corn farmer/farm worker/corn consumer. You would hire your neighbor to help pick your corn to feed his family. How does government contribute anything to that relationship but waste?

The only way government has ever helped private sector job creation is by tax cuts and tax rebates. This was proven by the immediate surges in market energy produced by 'cash for clunkers' and the homeowner tax credit. When people are keeping more of their money, they put more of their money into the economy.

There are only three roles for a human being in an economy. We all occupy two of the roles, and some of us occupy three of the roles. Those roles are:

Employer
Employee
Consumer

Most of us serve as both consumer and employee, a smaller number serve as employer and consumer. Unless the government is serving as the employer for work that can only be organized by the government ( military, police, infrastructure, etc. ), government has no role in the economy. Government jobs are a socialist sector of the economy that exist alongside the market economy. You don't strengthen a market economy by giving government a greater role, because government can only act in a socialist manner.

If there is a genuine need for employees in the market, the market will put them to work. If there is a product that is genuinely worth buying, the consumers will buy it. In all sectors of the economy other than the sector covering work that is traditionally and exclusively organized by the government, government intervention is a hindrance, not a help. There is never a need for a government to broker work between employer and employee in the private sector. If the need for workers and the need for work are genuine, the arrangements between worker and employer will form naturally. No government intervention is required.

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