The U.S. Bureau of Labor Statistics reported Friday that the economy was barely chugging along as employment dropped by 95,000 jobs in September on net. The good news? The government shed 159,000 jobs. The bad news? The private sector addeda paultry 64,000 jobs.
I comment on this more extensively at the National Review’s blog The Corner, but the short of the story is that demand-side aggregate spending by government to stimulate the economy simply doesn’t drive long-term growth. Sustainable growth depends on supply-side improvements in productivity and the new production of goods and services to meet long-term demand. Government spending can never be more than a stop-gap measure that maintains income (re: consumer spending) and it should not be confused with economic growth or improvements in national income or welfare.