Efficiency in Job Creation!

The “Stimulus” spent $111,000,000 to save 55 jobs. That is more than Two Million Dollars – per job. That’s just ONE example.

This travesty illustrates the inefficiency of using a “stimulus” to stimulate the economy. The government takes your tax money; buys (1) something very expensive and usually unnecessary with it (i.e. a “pet project”); and a few people get, or keep, a job for a while. Until the project is done. What then?

Private sector jobs count on repeat business for job security. There is no repeat business in “stimulus” work. It is also horribly inefficient at creating jobs, because the companies that do the work are aware that it won’t last – so they hire as few as possible. “Stimulus” plans cannot avoid being inherently inefficient and wasteful.

It has not helped that Obama and his party have used the “stimulus” as a means of implementing many of their pet social projects. This has not been an efficient use of the money, particularly in terms of jobs.

The most efficient way to pump money into the private-sector economy is – you guessed it – tax cuts! A tax cut produces no administrative overhead, the money goes directly into the pockets (2) of the people who need it for day-to-day living, and then gets injected into the retail economy as those people consume it. All businesses profit from the cash flow, and hiring goes up as businesses seek a production / market equilibrium. This also works across-the-board – almost every business sees a boost, not just road construction companies.

But Obama and the Democrats don’t want that, because they are statists. A statist wants control of who gets the money, because they want the centralized-government control it gives them. Obama particularly wants to take care of his union buddies, who universally get paid artificially high wages for what they do. Obama’s favoritism for the unions is obviously unfair to everybody else.

Government intervention in the housing / banking industry caused this mess in the first place; more government intervention is not going to fix it. The best way to a healthy capitalist economy is to leave it alone; it is self-correcting. We need a minimal federal government, because all government is parasitical on the economic system by definition; the impact of the cost of government is the largest limitation on growth of the economy. And capitalism works just fine when the government keeps its fingers out of the works.


(1) Hiring government bureaucrats to administrate this process, whose entire existence is paid for by tax dollars and are thereby parasitical.
(2) Well, actually, they get to KEEP more of their own earned money – the government is not “giving” it to them.

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