Issue Position: Jobs and the Economy

Issue Position

It is time to call the bluff of career politicians who still claim that increasing government spending will provide more and better jobs and help the economy grow.

Let's look at their claims closely.

THE GOVERNMENT HAS ONLY ONE SOURCE OF FUNDS

"Creating jobs" and "putting people to work" are two different things.
Yes, the government can "put people to work," but that is not the same as "creating jobs."
In order to put people to work, the government must take money out of the private sector economy in the form of either taxes or borrowing. Either way, it leaves less money for individuals (like YOU and me) or private businesses to spend.

Both individuals and businesses buy things. When they buy goods or services, they create demand for the production of goods and services which, in turn, creates jobs and better wages and benefits or, perhaps, more working hours for those already employed. This is good for the economy.
If the government uses the money merely to "put people to work" it…

*Hires bureaucrats (who do not produce goods and services you want to buy--even though we may be forced to buy these services)
*Pays politicians more of your hard-earned tax dollars
*Uses the money to build or repair (the politician's favorite) "infrastructure"

Of course, the so-called "jobs created" by infrastructure work--building road, bridges, utilities and so forth--are highly visible to the taxpayer, so the politicians announce with much hoopla all the jobs they are "creating" by spending your precious tax dollars in this way.

Remember: the government has only one source of money and that's by taking it away from the economy's producers--the people who produce and sell the goods and services that YOU and I want to buy.

THE UNSEEN SIDE OF THE ECONOMIC DAMAGE

Are the politicians really "creating jobs" by taking your tax money and spending it on highly visible public works projects?

The answer is simple: No, they are not! And here's why.

Because all of the money that is spent on these "make work" projects must first be taken away from the private sector--read: YOU and me--it means that there is less money in the private sector being spent for the products and services that YOU and I (or businesses) might otherwise buy.

That means there is less money being spent by taxpayers --who have had the tax money taken out of their pockets by government. This is money not being spent on things like:

Food
Gasoline
Lattés
Movies
Clothes
Video games
Televisions
CDs and DVDs
Automobiles
Airplane tickets
And much, much more!

In turn, this means that there are fewer people required to make and sell all of these goods and services. That means fewer jobs and higher unemployment and, if there is higher unemployment and fewer jobs, businesses don't have to increase wages or benefits to keep employees.

In short, any jobs "created" in the public sector by government spending are highly visible and the politicians are more than happy to take credit for their "creation" without acknowledging that had they left the money at work in the private sector a greater number of jobs would have been created for producers. (We say, "greater number" due to the known inefficiencies in government management and bureaucracies.)

ISN'T INFRASTRUCTURE SPENDING GOOD FOR THE ECONOMY?

Politicians will tell you again and again how "infrastructure spending" is good for the economy. But, is it really?

If spending some money on building or repairing highways and bridges really "creates jobs" and "helps the economy grow," then we shouldn't stop with building two-lane or four-lane highways. We should build eight-lane highways and 16-lane highways. The more highways and bridges the better because if a little spending on infrastructure is beneficial to the economy, then just think how much our economy would be booming if we spent billions or trillions more on the "infrastructure"!

Of course, when confronted with this, even the boldest of career politicians recognizes this as folly. As the public sector spending would grow--as more and more taxes or borrowing took money away from the private sector economy--businesses and jobs in the private sector would simply shrivel and die. Their profits taxed away, businesses could simply no longer afford to pay workers and production of goods and services would grind to a halt.

It's clear, now, isn't it?

WHAT'S THE RIGHT ANSWER?

The only way to have a really productive economy--one where the goods and services YOU and I want to purchase are produced in quantities that keep prices affordable--is to reduce the total burden of taxes on both individuals and on businesses. This leads, not only to the production of more affordable goods, but it also leads to more jobs, lower unemployment, and improving wages and benefits for all workers.

*It's time to end the endless promises made by politicians about getting Minnesotans back to work. As long as tax-and-spend is their approach, they will never create a stable economy.
*It's time to reduce--not increase--the burden of high taxes and big government that keeps businesses from creating more jobs and supplying workers with increased wages and better benefits.
*It's time to lift the deadweight of excessive regulations that keep entrepreneurs from starting new businesses and existing business from growing, because the real engine of economic growth is small businesses and entrepreneurial innovation--not crony capitalism and corporatism.

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