Out of Control Policy Blog

Should the Government Create Jobs?

With unemployment now up to 9.7% we are set to have a chorus of complaints about the administration's response. There already have been some critiques, but the flood gates will open after labor day. So to head off the wining, here are a few thoughts to consider about the nation's unemployment situation:

  1. Is it really the role of the government to create jobs? Do we elect politicians to give us jobs or to represent our interests by making it easier for jobs to be created in the private sector?
  2. If unemployment is still growing, and the government does feel it should do something about it, wouldn't tax cuts providing job creating private businesses with more capital be a better approach then spending taxpayers money to generate short-term projects that won't create sustainable employment?
  3. While unemployment is still growing, the numbers show 216,000 jobs were lost last month, but that is actually the slowest overall monthly decline in a year. We should be sure to consider the ramifications of a stabilizing job market carefully. Even if we don't start recovering jobs, signs that we might soon stop the hemorrhaging is important.
  4. On the flip side, though unemployment did bump up 3%, a chorus of other indicators signal that the overall economy has started to turn back up, which means unemployment will follow, albeit with lag time. But will we be so impatient that we extend out national deficit and debt, destroying job creation in the future?
  5. There are some complaints about wages not increasing along with unemployment problems, but reality is that with the economy down as a whole prices are depressed, and it only makes sense that wages wouldn't be rising as well. But that doesn't necessarily mean the real purchasing power of the dollar has declined.

Anthony Randazzo is Director of Economic Research

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Comments to "Should the Government Create Jobs?":

Paul Sebastian | September 6, 2009, 11:05am | #

The first question is a non sequitur, in that the government cannot create jobs with destroying something else, e.g., a job in private industry, or, what is really just the opportunity cost of this phantom 'creation.' Even government jobs themselves cost taxpayers money, so it cannot 'create' but rather, can only 'transfer.' We should elect courageous individuals who do not seek lifetime employment as elected officials but rather seek to promote free markets, and policies that encourage innovation and entrepreneurism (low taxes, etc.) When decisions are made by politicians who seek only the next term in office, we all suffer.

Shania | September 7, 2009, 6:00am | #

It’s should be the duty of the government to invest some kind of a job where their citizen can work. Since in this kind of economic situation it was really hard for the breadwinner to support the family if you don’t have a job. Sometimes, a fast cash is their way to bridge the needs of the family until payday.

Paul Sebastian | September 7, 2009, 9:15am | #

Sorry, in my first post, I meant to day 'without destroying something else.' Also, let me add that the government can 'create' jobs by, as I said, encouraging innovation and entrepreneurism, which can be done by promoting free trade and lowering the corporate tax rates, which, if I recall correctly, are the 3rd highest in the world. Of course, this also means that the government would have to shrink in size, especially the federal government, in order not to raise taxes in order to fund their existing obesity.

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