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Rep. Perlmutter and the "job-creation snow job"

Posted by WhoSaidYouSaid on March 28th, 2010
 
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It’s tempting to view the federal government as Big Daddy who can make the pain go away, particularly the pain of a 10.4 percent unemployment rate.

In the video above [at 1:50] U.S. Rep. Ed Perlmutter, D-Colo., makes the case for spending $600 million “for job training, for summer jobs. It’s to get people back to work. When we get people back to work, when this country has employment that is better than today, then we can really take a good look at the [$12.7 trillion] debt, as [Republicans] suggest.”

Here’s the problem: “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,” wrote economist Thomas Sowell in a December column titled, “The Job-Creation Snow Job“.

He wrote further, “None of this is peculiar to the current [Obama] administration. The Roosevelt administration created huge numbers of government jobs during the 1930s — and yet unemployment remained in double digits throughout FDR’s first two terms.”

Meanwhile, as House Minority Leader John Boehner, R-Ohio, wrote recently, the national debt today “is on track to exceed the size of our entire economy (about $15 trillion) in just two more years.”

Think that’s just partisan games with numbers? Here’s the fact check from Politifact.com.

Furthermore, at debt/GDP ratios “Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more,” according to “Growth in a Time of Debt,” a draft research paper from professors Carmen M. Reinhart at the University of Maryland and Kenneth S. Rogoff of Harvard University that reviewed 44 countries “spanning about two hundred years.”

So, piling up federal debt to create jobs will take away jobs from the private sector and could lead to slower future growth.

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  • Post by WhoSaidYouSaid on March 28th, 2010

One Response to “Rep. Perlmutter and the "job-creation snow job"”

  1. [...] as we pointed out in March, is an apparent believer in the snow job that government transfers of wealth will somehow result in sustainable private-sector [...]

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