Government Does Not Create Jobs – It Kills Them
Probably one of the greatest misconceptions that is pitched to the public by those in power is that Government can somehow create jobs or lower the unemployment rate. Government cannot create jobs, because it does not create wealth. It can only transfer wealth from the private sector (individuals/corporations) to government, thus consuming it – not creating it. In this process it does not create a job, but instead transfers wealth that would be used to create productive employment and more potential wealth.
Mark Alexander explains this very well below…
First: Let’s clear up a misconception: Government does not create jobs because it does not create wealth. Government is a consumer of wealth, not a producer.
As my colleague and noted economist Thomas Sowell writes: “What does it take to create a job? It takes wealth to pay someone who is hired, not to mention additional wealth to buy the material that person will use. But government creates no wealth. Ignoring that plain and simple fact enables politicians to claim to be able to do all sorts of miraculous things that they cannot do in fact. Without creating wealth, how can they create jobs? By taking wealth from others, whether through taxation, selling bonds or imposing mandates. However it is done, transferring wealth is not creating wealth. When government uses transferred wealth to hire people, it is essentially transferring jobs from the private sector, not adding to the net number of jobs in the economy.”
As Heritage Foundation’s Conn Carroll notes, “every dollar Congress ‘injects’ into the economy must first be taxed or borrowed out of the economy.”
And, to add insult to injury, government is an extremely inefficient consumer of wealth, with up to 70 percent of income-transfer program (a.k.a., welfare program) budgets going to bureaucratic overhead.
So, how can government influence job creation? Well, it actually can – by getting out of the way. Big government is nothing more than a leach that destroys wealth, jobs, and prosperity. The best way politicians can create jobs and prosperity is to reduce the size, scope, and consumption of the federal and local government.
Unfortunately, it takes an honest politician to propose and make these changes because it reduces their power, wealth and influence in exchange for the prosperity of the people. As we all know, there are very few of these politicians around…
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