Government, wealth, and jobs

I'm sure you've heard the claims many times:

1) Government can't create jobs

2) Government can't create wealth

3) Government workers are just overheard, and a drain on the economy

Variations of this quasi-hardline-libertarian material have been promulgated ad nauseum over the last few years.  We heard it this very morning, as Senator John McCain claimed on Meet The Press that government can't create jobs.

Other lawmakers and Right Wing commentators have gone full in with all three claims, of course.

So, is there any truth to them?  In a word, "no".

The idea that government can't create jobs is silly on its face; as a federal employee, I'm a living, breathing example that the government can, indeed, create jobs–nearly 2 million of them on the federal side.  Those jobs are filled with employees that turn around and spend the money they earn, just like everyone else.  The jobs are counted (as they should be) in statistics of job creation, employment, and productivity.

Of course, most of the job creation in which government is involved is indirect: from managing the excesses of capitalism to funding infrastructure projects and getting the economy moving during downturns, government has played a critical role, over and over, in job creation.  You have to ignore, well, pretty much everything (deliberately and for clearly political reasons) to believe otherwise.

So, what about the idea that government can't create wealth?

It's helpful to define "wealth", of course, Wikipedia provides the following definition:

Wealth is the abundance of valuable resources or material possessions.

So, using this definition, what qualifies as the "creation" of an "abundance of valuable resources or material possessions"?  Read strictly, it would seem manufacturing might be the only field that would fit the bill; this would be the classic John Locke definition of the creation of property: the admixture of effort and raw resources.

It can hardly be said that government does not create property: the military is an obvious example of conbining physical labor with raw resources for the making of things, which then becomes property owned by the government.  Researchers at national labs and other facilities fabricate devices and equipment, facilities folks at government buildings engage in renovation and repair, etc.

Of course, much of the private-sector manufacturing industry itself is involved in support services which enable manufacturing, rather than manufacturing itself: logistics, administration, design and engineering, etc., without which manufacturing would nevertheless not take place.  And both in the private and public sector, much if not most effort these days is directed towards the provision of services.  The bottom line is, distinguishing between the private and public sector in terms of "weath creation" is extremely difficult, if not impossible.

So, what about talking point number 3?  This talking point is typically rolled out in a desperate attempt to recover from the tatters of argument number 2, and it goes something like this:  every dime government takes in is from taxes; thus, government simply drains the economy.

A little thought is all that's necessary to debunk this one:  one can just as easily say that every dime most companies bring in is from fees and payments taken from customers.  Is this a "drain" on the economy?  Ignoring what one receives for what one pays makes it easy to see any fee as a "drain",   And calling one a "price" and another a "tax" is insufficient to distinguish between the two.

Nor can one derive a difference by saying taxes are involuntary: we live in a democracy which gives us a say in how much we pay and what services we receive.  What's more, fees for services received in the priivate sector, such as payment to landlords, are not "voluntary", either (failing to pay is called "stealing").  And if you don't want to receive those services, you have the freedom to choose whether to live here as a citizen–there are around 200 countries from which one could choose, with a wide range of services and taxation, plus the open ocean.

Perhaps those who promote argument #3 can come up with a reason why "taxes" are a drain and "prices" are not, but they have yet to do so.

 

Pure comedy gold can be found depending upon who is promulgating these arguments.  For instance, when a lawmaker claims that government can't create jobs and that government workers are simply a drain on the economy, one might ask whether that lawmaker employs a staff, and if so, why the lawmaker would deliberately drain the economy by paying such non-productive staffers.

When you hear arguments like these, don't buy them.  Government workers, at every level, provide critical services and products which not only are not a drain on the economy, they are critical for economic growth and wealth creation, both directly and indirectly. 

It is in the Right Wing's interest to claim the absurd in a desperate attempt to oppose Obama's economic policies, which have been boilerplate for more than 60 years.  Consider the source.