Sunday, September 14, 2008

The Fallacy of Government creating jobs

If anyone cares about their country and is old enough to vote, they have surely heard about Democrat Presidential Candidate Barack Obama's plan to invest some 150 Billion dollars over 10 years in an effort to create "green" jobs that amount to some 5 million high paying positions. To most people this sounds like a very attractive idea and plan. But most people are ignorant of economic concepts so lets look into the fallacy of government creating new jobs.

The United State Government cannot "create" new jobs as in "create" new wealth like Obama and others try to claim. The fallacy in this argument is that Government does not create anything without destroying another. I have already lost some of you I'm sure so allow me to explain. Government owns no amount of money and thus can create nothing. It can only take what we have in the form of taxes and then do with that money what it wants instead of us doing what we would have wanted if we could have kept the money. This misunderstanding is known as the "Broken Window Fallacy". This analogy is in great timing. If Obama's plan made sense then it would also make sense to say that you are glad that hurricane Ike hit Texas because now there are many jobs that will be created to rebuild the homes and businesses that have been destroyed. The truth is yes jobs are available down there now to do this but those jobs have simply been transferred from one place to another to fix something that has been broken. When someone breaks a window a glass maker is paid to fix it. That is a job "created". But that money could have been spent somewhere else thus a job is also loss. That job might have actually created wealth instead of fixing something that has been broken.

The point is simple. Obama "creating" these 5 million jobs is not him creating wealth or anything that would benefit us. It is him diverting resources that could be spent somewhere else, to do what HE thinks is best. He believes that he and his politician crew and his advisers know what is best. That is why he is running for president. But the truth is that since the free market private sector has not created these green jobs already it means that those jobs must not be very efficient and in fact must be a waste of resources. If it were worth something, someone in the private market would have already been doing this work in order to earn high profits.

When Obama makes his beautiful speech about creating these "green" jobs, what he is really saying is this: "I know what is better to do with your money then you yourself know what to do." Obama wants to raise our taxes to pay for his programs because he believes that HE is smarter with OUR money that WE are. The question is not whether or not Obama is creating new jobs for the economy while also helping the environment. I just answered that. The question you have to ask yourself is "do I think Barack Obama knows what is better to do with MY money than I do?"

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