Pajamas Media

32 Comments

1. Craig:

“But where does the government get that money?”

Reminds me of the oft-used joke: I must have money, I still have plenty of checks left.

Dec 5, 2008 - 4:54 am 2. Brian Hines:

Hmmm…you know, I never really considered that point of view before. I supported Bush’s stimulus packages and I thought to myself at least Obama and the Dems would also try to inject money into the economy for spending which would likely boost it with job creation. It hadn’t occurred to me that they took my money to give me some money, less than what I gave them.

Of course, the reason it doesn’t occur to most people is because we’re deficit spending so most of the money they’re giving me is not from my pocket, but China. So in essence, they’re filling up my right pocket with my children’s left pocket.

Dec 5, 2008 - 5:18 am 3. dscott:

Hopefully our growing chorus of warnings will be heard, otherwise the government spending spree will drain the liquidity of the private sector to such a point that little investment will be made in plant and equipment. If that happens then a downward economic spiral will occur as those with the means will lose the ability to invest in the future. Consumption spending is for today, savings and investment is for tomorrow.

The second key fallacy of Keynes is the idea savings and investment are two completely unrelated economic forces. Without savings, banks can not loan money and corporations can not raise funds. Without savings today, there can be no investment for the future. Pump priming the economy for consumption spending is a short term tactic that is self defeating as it sacrifices investment in long term viability for a short term stability.

When you understand savings is the key to economic growth, Democrats efforts at discontinuing the deductibility of payroll contributions to 401ks and IRAs in a futile attempt to increase tax revenues are the worst possible thing the government can do. Savings & investment is thee foundation stone of the economy, kicking out the foundation will cause the economy to collapse.

I would like everyone to take note that if government spending via borrowing and taxing was the answer, then why did we go into recession in the first place since the federal deficit has been growing for the last 3 years???? So far for 2008 it is projected to be $800 billion, which does not include the bailouts. What really happened is $800 billion is being withdrawn from the private sector due to the deficit, on top of the $700 billion for Wall Street, on top of previous bailouts this year for other industries, on top of some $200 billion that was withdrawn from the domestic economy due to the domestic oil drilling ban forcing the use of foreign produced oil.

http://conservablogs.com/publiusforum/2008/12/03/the-great-money-printing-cover-up/

http://conservablogs.com/publiusforum/2008/11/06/the-coming-depression/

http://conservablogs.com/publiusforum/2008/11/10/the-opposition-response/

Dec 5, 2008 - 6:39 am 4. Adrianne:

As a government employee, I certainly agree. While there are many (especially high-level) gov’t employees that make much less than they would in the private sector (our mayor, in Houston, makes about 10 percent of what he made before switching to mayor, for example), the lower ones, especially if you factor in time they actually work and all the benefits, are massively overpaid. The benefits are so poorly done, too — I was self-insured at $56/month, but now they’re insuring me at $350/month. I’d much rather self-insure and get an extra $300 in my paycheck, but unfortunately that’s not an option. Everything’s over-expensive due to regulations (needed a printer, couldn’t get a free-with-rebate one from Fry’s, had to get the SAME BLASTED MODEL at full-price from the government-approved vendor). …. and yet we want this system to run even more of our lives. My husband’s a doctor, trained several months in the VA system, and says it has to be ignorance of how massively different (and inferior to private sector in pretty much everything except prosthetics research) that system is that makes people want to make it the only option nationwide. But, there you go…

Dec 5, 2008 - 7:28 am 5. Carolb:

Yeah, I thought he said he would create 2.5 million jobs, too, but, apparently, we misunderstood. His people have clarified that his plan is to create or “SAVE” 2.5 million jobs. Big difference.
http://www.cnn.com/2008/POLITICS/11/22/obama.economy/

I’m not sure how he’ll prove he saved jobs, but I’m sure his people will come up with something. Maybe they’ll claim credit for the coming auto bailout. That’s at least a million or so jobs “saved” right there.

Besides, 2.5 million jobs in public works projects and construction. I don’t know where you live, but, where I’m from, those jobs will be taken by Mexicans.

Dec 5, 2008 - 8:42 am 6. Mike T:

The government can always borrow money from other sources outside of the economy, such as a foreign government. The catch is that it is then indebted to foreigners, which can ruin the independence of a country. The $700B bailout plan was done in no small part because our Middle Eastern, Russian and Chinese financiers demanded that we protect their investments in our economy.

So, in reality, Keynesianism offers two choices: screw up the efficiency of the allocation of capital in your economy through redistribution of wealth or risk becoming a vassal of another state or large foreign investment groups.

Dec 5, 2008 - 8:47 am 7. G Alston:

The argument Mitchell makes assumes a vacuum.

Government creates jobs all the time… e.g. Navy needs an aircraft, this isn’t something that you buy off the shelf. Space program needs stuff. Not on the shelf. New SDI initiative wants to build an orbital boost phase missile detector. Not off the shelf. Army needs to have sat based locator system for battlefield management. Not off the shelf.

You could possibly argue that the same resources that are used to create these new things are taken from other jobs. In the case of military hardware… what jobs? Working the iPod line? Not really.

Moreover, take *just* my last example re the Army. This resulted in GPS. You buy them in your cars, or you can get portable units at walmart for $100 and up. Think of how many jobs there are that never existed before this.

One problem is that Mitchell is talking short term, whereas the government can be very very good at “trickle down” jobs. And make no mistake, when the government invests in technology there are jobs created. By the bushel. Computers, semiconductors, the internet. All of it jumpstarted by government investment. Today’s economy is vastly different than that of the 1950’s. You may not be able to even count the jobs government created.

The other glaring problem with this article is that it, as I said, assumes a vacuum. It’s almost Marx level simplistic, where Marx assumes that there are owners and workers, and that’s going to be the way things are. He never considers that new technology is the wild card that changes the equation. In a similar fashion Mitchell ignores technological growth completely, assuming some sort of artificial stasis where the government job creation engine is seen as the technological equivalent of working at burger king. But that’s not real life, which is that every time the government orders an aircraft and demands a spec of this or that, this spec filters into the civilian world later and creates jobs.

Possony and Pournelle wrote a short book entitled “The Strategy of Technology” which was at one time part of the course requirements for military officer training. You can find this online (thanks to government and DARPA of course.) Use google. Technology is and what has been what separates the US from the rest of the world. Much of what we have today is the direct result of the dreaded military-industrial complex. I reckon economists and poly-sci people, most of whom are abysmally ignorant of technology, ought to start recognising that their blather about jobs creation is based on a stasis that simply doesn’t exist and never did.

Dec 5, 2008 - 8:48 am 8. tmoreland:

when i was in econ 101 – or was it 102; like so many other things today, i can’t remember – i was taught that, for every tax dollar taken in and redistributed by the federal government either for “legitimate” infrastructure spending, and the like, or to the needy, only about 30 cents reaches the intended targets. That was when government employees were considered underpaid. With their now being overpaid, does that mean only about 10 or 20 cents gets through the bureaucratic feeding frenzy? or might it be even less?

Dec 5, 2008 - 9:01 am 9. dscott:

#7, you make a good point that SOME parts of government spending does have spin offs like GPS or many from NASA’s activities, however, that does not change the effects of how government funds itself and to what end such money is spent. It’s called EFFICACY. The military is a uniquely government function, like the police, firefighter, etc. Our objection is NOT saying ALL government funding or activities are illegitimate and therefore a taking of resources from the private sector.

However, much of what is done, specifically the bailouts and their underlying cause is outright wasteful and harmful. E.g. The CRA. Were it not for the Congress meddling in the housing market legislating that Fannie Mae, Freddic Mac and Banks make unsound loans, this current financial meltdown would not exist, period. On top of this was ACORN, represented by none other than Barack Obama sueing Banks over “redlining” forcing banks to make unsound loans in the name of equality. The bottom line is every dollar the government spends to mitigate the disaster they caused only makes the situation WORSE as they are bleeding the private sector dry of capital needed to invest in plant and equipment.

Another good example of government costing the economy with PC agendas like the domestic drilling ban, because of this foolishness close to $200 billion was siphoned out of the US domestic economy in 2008 because Congress in their seemly infinite stupidity outsourced our crude oil and natural gas supplies. Unless you count driving the economy into recession as a valid means of energy reduction this policy DID NOT SAVE ONE DROP OF OIL or prevent CO2 emissions.

The bottom line is EVERY Dollar the government wastes, and that’s most of it, is a diversion from wealth and job creation. Employing millions of bureaucrats is a colossal waste of talent, time and money. Imagine all the great ideas that have squandered because you perfered bureaucracy over individual effort and creativity!

Dec 5, 2008 - 10:26 am 10. Quincy:

G Alston –

You make Mitchell’s argument better than he does. The government puts taxpayer money to effective use when it seeks to spend it on things that actually further governmental goals. Because this goes to something useful for the government, it creates spin-off technologies which benefit many more people.

Economic stimulus of the Keynesian kind fails because doing things *for the sake of doing them* is always inefficient. If the federal government wanted to provide an economic stimulus, it would streamline itself so the money it spends is spent as efficiently as possible, and it would leave a lot more money in the hands of us taxpayers.

Redistribution and massive public works for their own sake *always* fail. Spending money on useful things stimulates the economy, whether done by the government or taxpayers.

Dec 5, 2008 - 10:35 am 11. G Alston:

#9 dscott — “Imagine all the great ideas that have squandered because you perfered bureaucracy over individual effort and creativity!”

Non sequitor.

Mitchell’s headline: “The Fallacy That Government Creates Jobs”

My answer shows that it’s no fallacy; government creates jobs. Spectacular ones at that. My reference to Possony/Pournelle shows that this is also a vital global geopolitical strategy and in fact has driven much of US policy for decades. Last time I looked, the US was the world’s sole superpower, so obviously something is going right. Mitchell is simply wrong.

Where there ought to be concern about an Obama jobs program is where it concerns green crap. Socialists have a corrupted, skewed view of the relationship between government and technology and seem to think that mandating greenthink results in instantaneous jobs. (Mitchell is certainly correct about that!) It’s a pitiful and scary thing to behold, this lefty ideal of technology creationism. Ironically, they look down upon the religious fundamentalists. The mind boggles.

Dec 5, 2008 - 12:44 pm 12. JW:

“It overlooks the fact that, in the real world, government can’t inject money into the economy without first taking money out of the economy.”

-But what if there is a credit crisis?

Dec 5, 2008 - 1:04 pm 13. xqqme:

During my 30 years in the transportation business, I have watched the government waste the taxes I have paid such as 2290’s and F.E.T. of 12.5% through the years. The government has only spent 11% of the designated taxes on infrastructure during this time.
Now, many trucking companies have closed depriving the Fed of revenue and we have driven less miles this past year also reducing federal revenue.
Where is the extra revenue supposed to come from with less resources?

“The avoidance of taxes is the only intellectual pursuit that carries any reward.”
(John Maynard Keynes)

Dec 5, 2008 - 1:39 pm 14. Oscar:

that really is a falacy. But yaknow..I see high paying jobs posted on popular job sites –

http://www.linkedin.com (professional networking)
http://www.monster.com (keyword job search)
http://www.realmatch.com (matches jobs based on skills)

I think the media is trying to scare the US workforce.

Dec 5, 2008 - 4:48 pm 15. Paul:

G Alston: Yes the government created jobs, or more accurately wealth, with GPS and semiconductors. It works when the scale is either too large, GPS requires a large network of extremely expensive satellites, or too long term, both GPS and early semiconductors, for the private sector. The military provided the market for early semiconductors. In both cases it was starting new technologies that the private sector could then develop further to create even more wealth. How does Keynesian economics falls into that category? The government isn’t giving money to people to start businesses and build things or provide services. It’s just re-distributing money from those who have to those who don’t. Did welfare make poor people better off in the long run? Don’t think so.

Dec 5, 2008 - 6:54 pm 16. myth buster:

Paul’s right. G Alston does have a point that government does create jobs, but the items which do result in real job creation are also completely irrelevant to the discussion because no one is suggesting them in relation to the stimulus packages. If we were launching a massive new initiative to set up a lunar colony to mine Helium-3, develop nuclear fusion power and eliminate all our oil imports, that would create jobs, but that is not what is being proposed. What is being proposed is a massive redistribution of income, which could only increase aggregate demand if the money was either A) borrowed from foreign countries (possible, but fleeting since we cannot borrow an infinite amount of money), or B) printed (which would expose us to hyperinflation risk when the economy recovers).

Dec 5, 2008 - 7:41 pm 17. fred:

Also, the timing of stimulus packages makes them ineffective. By the time the money gets into the economy the worst of the damage is typically done and things have bottomed out. The cost of administering them siphons off some of the money. Also, the stimulus, intended for consumers, will have no effect on businesses that export products overseas. And since this is a developing GLOBAL recession, the stimulus typically only attempts to buck up domestic spending and demand, which ultimately may have little effect on job creation.

This recession, like all others before it, will run its course. The seeds for recovery are already being sown, it’s just that most people, lacking an education in economics and finance, don’t understand what those are: falling inflation, especially falling energy prices, falling home prices, falling prices of commodities. The financial system is also de-leveraging, as banks are getting their balance sheets stronger. Lower interest rates will have their effects, given time.

Here are the things that will kill the recovery:

1. The cap and trade system (essentially Kyoto Protocols penalties by stealth).

2. Shutting the door on domestic energy production.

3. Higher taxes on businesses and individuals.

It would appear that the crowd that is piling into Washington now favors a hard cap and trade system, which is very bad news for the economy. It means there will be a recovery… eventually. But that recovery will be sub par. I’m expecting the unemployment rate to reach 8% by mid – 2009. Under a hard cap and trade system we might get back to around 7%, maybe slightly under, but it will still leave us with higher unemployment than when the Obama administration took off running in the Fall. Plus, it will mean higher energy prices, which will mean higher prices for just about everything else.

So, get ready, kiddies, for the Carter lesson we got but you either were too young to know about or you weren’t born yet to experience.

Dec 5, 2008 - 9:19 pm 18. G Alston:

#15 Paul — “How does Keynesian economics falls into that category?”

Nothing to do with my point. My goal in this thread has been merely to state that government does create and has created jobs and this is completely at odds with the headline. I wasn’t really intending to reach beyond that point.

However, you bring up an interesting sidebar here.

My guess is that you could take a few hundred thousand labourers and put them to work building scores of smaller new design 500 MW thorium reactors (thorium isn’t something one runs out of quickly) in a purely WPA style project, which is a pure “Keynesian economics” wealth transfer boondoggle, and what I have said is still valid.

Criticism of “Keynesian economics” without taking technology creation (which, thankfully, you have correctly identified as wealth creation) into account is simply invalid. This is especially true if what’s being created is energy infrastructure. Abundant cheap(er) electric energy will lose some jobs (e.g. coal), but the number of jobs private industry can create because of cheaper energy is an astounding figure.

#10 Quincy — “Economic stimulus of the Keynesian kind fails because doing things *for the sake of doing them* is always inefficient. ”

Read what I wrote about thorium reactors. Government can do this for the sake of doing it and everyone comes out ahead. Private industry isn’t able to finance/build 10 to 20 reactors in every state. Government certainly can. So what if the costs of such creation don’t seem to be as efficient as corporate beancounters would like? The only valid viewpoint is the long term. And in any term you care to consider, energy and wealth are synonymous. Take away energy, and the US is Afghanistan.

****

In case it is not clear what I am saying, it’s that I can give you plenty of examples where “Keynesian economics” works exactly as advertised: government creates jobs and all benefit. And every time I do so someone will claim that this is a special case.

No. It’s not. It’s not restricted to the military. It’s not restricted to anything except technology.

Paul (#15) nailed it: technology = wealth creation. When government is engaged in the business of creating technology it is also creating wealth. Any time there’s wealth transfer *without* technology being created, there’s no long term wealth created, and criticism of Keynes is spot on. But technology creation is the key. And as I said in my first post, Mitchell’s article and others are ignoring the role of technology, and my guess is that he and similar critics simply don’t understand that, quite simply, technology = wealth. And in the case of reactors, energy = wealth.

And that, boys and girls, is that.

Dec 5, 2008 - 10:44 pm 19. Quincy:

My guess is that you could take a few hundred thousand labourers and put them to work building scores of smaller new design 500 MW thorium reactors (thorium isn’t something one runs out of quickly) in a purely WPA style project, which is a pure “Keynesian economics” wealth transfer boondoggle, and what I have said is still valid.

No, it’s not. It would be an unproductive boondoggle that would do little to advance technology, a la the biofuels fiasco currently playing itself out. The reason we got useful technology out of the cold war military and space projects is that intelligence was used to solve real world problems that had no previous solution. Instant communication, spacecraft, satellites. These were things that were so novel the teams developing escaped the meddling of the bureaucrats because the bureaucrats simply didn’t understand them.

Your thorium reactors, however, are not technology creation, they are technology *implementation*. You’ll notice that, with many of the great breakthroughs you herald, it wasn’t the government implementing the technology it designed, it was corporations doing it for the government.

In case it is not clear what I am saying, it’s that I can give you plenty of examples where “Keynesian economics” works exactly as advertised: government creates jobs and all benefit. And every time I do so someone will claim that this is a special case.

It’s not so much a special case as a different and more historically consistent viewpoint on the successes and failures of “Keynesian economics”. Government’s role in the creation of technology is to create demand for new technology, and help with research and development to meet the needs. This process results in breakthroughs that spread throughout the economy, making everyone more wealthy. This is not economics at work, since his theory rested on the idea the idea that economic growth could be catalyzed by the government spending resources on things for which there was little or no demand. In all the cases you cite as Keynesian economics, the government created an intellectual demand for a novel solution.

I absolutely stand by my statement that implementing big public works projects for their own sake, or for the sake of creating jobs never works, because it never *has* worked. Roosevelt’s New Deal was an economic disaster, and the public works of LBJ’s Great Society were social disasters.

If you want to create a project that would have long-term economic benefits to humanity, my suggestion would be taking up the challenge of landing a human being on Mars by 2020. This would spur research and development in areas of energy generation and conservation, battery technology, life support, and nanotechnology. Imagine an electric car with a range of 2000 miles that could partially charge itself with the ambient light it receives while parked, or a cellphone with 40 hours of talk time instead of four.

Necessity is the mother of invention as well as efficiency. The US Government can create necessity through lofty goals, and in doing so spur on technological development. A jobs program to create technology that is not necessary will be neither efficient nor inventive.

And that, as G Alston would say, it that.

Dec 6, 2008 - 1:48 am 20. Bill N:

G Alston:

The fallacy in your argument is your assumption that the jobs you claim to have been created by the government would not exist except *for* the government. Just the opposite, the government prevents far, far, far more jobs *from* being created than it allows *to* be created. Take your example of thorium reactors. The reason we don’t have thousands of people working to build them is because the government, led by Harry Reid, has said “NO!!! You cannot do that!” Take Reid and his fellow luddites and deport them for 20 years and we would be free from dependence on oil forever. Remove 95% of government regulations and millions of jobs would be created. Eliminate corporate taxes and the entire world’s supply of jobs would flock over here. “Government created jobs”, what a laugh!

Dec 6, 2008 - 5:21 am 21. Ann:

The government doesn’t have any money.

That’s why they keep taking ours.

Dec 6, 2008 - 5:25 am 22. G Alston:

#19 — “Your thorium reactors, however, are not technology creation, they are technology *implementation*. ”

Correct, which is why I took pains to make it clear that technology creation and energy enjoy the same status. Creation of new technology and largescale (government) implementation of energy still equals wealth creation and jobs creation. As in the following:

#19 — “I absolutely stand by my statement that implementing big public works projects for their own sake, or for the sake of creating jobs never works, because it never *has* worked.”

This too is correct, except where technology/energy are concerned. Hoover Dam and TVA are also projects that worked.

#19 — “If you want to create a project that would have long-term economic benefits to humanity, my suggestion would be taking up the challenge of landing a human being on Mars by 2020.”

Agreed. Thing is, I don’t think IBM or Boeing can swing this by themselves. Government would have to be involved. Bush’s VSE is exactly the thing that was needed. I agree with it. And it also underscores my point: government involvement with this stuff will create jobs.

***

#20 — “Take Reid and his fellow luddites and deport them for 20 years and we would be free from dependence on oil forever.”

Nope. Most oil isn’t burned in cars, and it makes fantastic feedstock for plastics. It’s far too valuable to simply burn. We’d still import just as much oil for the near future.

http://www.gravmag.com/oil3.html#barrel

#20 — “Just the opposite, the government prevents far, far, far more jobs *from* being created than it allows *to* be created.”

Ahhh, it’s “proof by repeated assertion week” at PJM. I suppose that somewhere in theoryland you might be able to gin up a scenario in which you can imagine the modern world being created solely via clever entrepenuers whilst evil government has the musket and sailing ship markets cornered, but sooner or later you’ll also have to deal with facts.

Every job you can see that is technology related (nuclear power, electronics, software, etc.) is the direct result of the government being involved. That’s simply historical fact. Of course, I have this tendency to look at facts and real world results and weigh these as being more relevant than theoretical assertion. I’m just funny that way.

#21 — “The government doesn’t have any money.”

Sure it does. WE are the government. It’s OUR money.

Dec 6, 2008 - 9:00 am 23. venividivici:

G Alston,

I would be willing to bet that the same outcomes we all desire could be achieved by the government announcing that it had goals X,Y,Z in certain areas and the person/team that achieved those goals would have the right to profit from them for a set number of years without taxation.

From what I hear you saying, you’re making the case that there are “public goods” that only the government can provide directly, but I would argue that while there are “public goods”, the government can probably best provide them indirectly through incentives like tax moratoria.

In the examples and eras you cite, capital markets were definitely not as well-developed as they are now, primarily due to lack of communications infrastructure. With today’s capital markets, I think the government would do better to provide those indirect incentives and let the market allocate capital to the actual projects meant to achieve the goals.

Dec 6, 2008 - 10:17 am 24. Quincy:

This too is correct, except where technology/energy are concerned. Hoover Dam and TVA are also projects that worked.

Now you’re the one arguing a special case. I’ve already laid out why government involvement in “novel big goal” projects spurs economic development, and it’s not the fact the government is throwing a lot of money at it. I can’t fathom why you’re trying to shoe-horn energy into this, though, because it doesn’t fit.

Unless you can prove that the money that went to Hoover Dam and the TVA would not have resulted in more jobs in the private sector *and* would not have resulted in more economically efficient production of energy, you can’t claim these as successes.

Hoover Dam, especially, is about to show the problem with picking a certain technology to do a certain job by fiat and building it on a massive scale. Because Hoover Dam stood for so long as the edifice that provided Las Vegas with both water and electricity, it caused the people of that area not to look for other solutions and instead just keep building. Now, Las Vegas is facing shortages of both water and electricity because of the distorting influence of Hoover Dam on economic decisions the last 70 years.

Government implementing energy projects, such as Hoover Dam, the TVA, or your thorium reactors is rather similar to JFK announcing that by the end of the decade the US will land a man on the moon *in an airplane*. Instead of creating the demand and letting the intelligence of many individuals solve the problem, he would have been picking a solution by dictate in advance. It would have been a waste, and would have had many unintended consequences.

Agreed. Thing is, I don’t think IBM or Boeing can swing this by themselves. Government would have to be involved. Bush’s VSE is exactly the thing that was needed. I agree with it. And it also underscores my point: government involvement with this stuff will create jobs.

I never said the government can’t create jobs, or can’t be involved in creating jobs. Such a blanket claim is simply false. The question is how does government create jobs in an economically useful way. Like I’ve said several times now, when the government picks technological winners and losers by fiat, it is economically destructive. That includes energy. When government sets it sights on a goal and calls upon the economy to solve it, the mechanisms of the economy work and jobs are created long-term.

Paradoxically, when government *tries* to create jobs, it destroys them.

Dec 6, 2008 - 11:40 am 25. design jobs:

I love thsi info. so good indeed.

Dec 6, 2008 - 12:48 pm 26. Bill N:

G Alston:

Fact: In order for nuclear power to provide energy we need a place to deposit the waste generated.

Fact: Harry Reid (i.e., the government) prevented the opening of the Yucca Mountain repository. Therefore…

Fact: The government has prevented jobs from being created for lack of affordable energy. For example, the U.S. auto industry would be in great shape if it was producing hydrogen fueled, fuel-cell powered cars and trucks but it can’t because there is no electricity to make the necessary hydrogen fuel. Now, then, how many jobs is that? The UAW says millions.

Correction: In my previous post, I meant to say that we would be free from dependence on *foreign* oil. My apologies. I agree, it’s too valuable to burn, but if we had electricity to heat up oil shale to free its petroleum, the U.S. would have at least a TRILLION barrels of domestic oil. That enough for plastic manufacturing, do you think? More jobs lost.

Dec 6, 2008 - 4:25 pm 27. Oolon_Colluphid_Dem:

Money also comes from international loans. Just ask China (whose holding a hefty chunk of our debt). Not to mention that strategic increases in taxation, or lowering of corporate subsidies, does not destroy the private sectors ability to respond to demand. If this were true then the new deal should have destroyed the economy instead of saving it (if your an economist) or delaying the recovery (if your an idealogue).

It is self-evident that in order for government takings to destroy the private sector’s resources we would have to be talking about full scale command economics ala the soviet union and not the moderate tax policy of modern neoliberal democrats. Not even european social-democrats or american progressivism represent any significant threat to the ability of the private sector from functioning. These policies might have been detrimental to pre-industrial revolution europe (Smith and Bastiat) but modern economics is a far different landscape.

Dec 7, 2008 - 5:33 am 28. venividivici:

Oolon,

So, rather than prove any of your points, you’ll just assert them to be true? Certainly there’s a cross-over point at which taxes become detrimental to the economy whereas prior to reaching that point they were not, but to presume that point lies exactly where “american progressivism” would like it to lie is improbable at best. Given what we intuitively know about human nature and willingness to work for others not directly related to us by kinship, that rate is much more likely to be at the low end of the scale than the high end. There is, of course, a countervailing evolutionary mechanism that forces people such as yourself to proclaim that rate is at the high end. It’s called, in layman’s terms, “moral grandstanding”.

A what was that ill-informed dig at economists who recognize that the New Deal was not the salvation it’s made out to be? Unless you’ve got a whole set of data that no one else has had a chance to analyze, it’s very likely that the scenario is the exact opposite to what you’ve, again, simply asserted rather than proved.

Who teaches liberals how to debate these days? Whoever it is, they are not doing their job very well.

Dec 7, 2008 - 11:15 am 29. Kathryn (Petition: We Demand True Conservative Leadership):

“Government can’t inject money into the economy without first taking money out of the economy.” Excellent point (and article)!

Unfortunately, these facts and the accompanying logic mean nothing to liberals who value above all government acting as puppeteer to its citizens.

Tragic for all of us. Let’s do what we can to persuade Congressional Republicans to start standing up for Conservative principles which WORK!
http://www.gopetition.com/petitions/we-demand-true-conservative-leadership.html

Dec 7, 2008 - 8:19 pm 30. Ed:

I’ve got an odd suggestion… Let’s give aid to companies that did things right, that followed the rules, that made good profites without “smoke and mirror” techniques, that had competent management, and so forth. This way, they can grow larger, hire more people, and grow the economy. Why throw more money into the failings of GM, Chrysler, and Ford? Why throw more money into the deceitful practices exercised by most of the Wall Street firms. Why give people a break that signed mortgages they could not afford to repay? Has everyone lost their frigg’n minds?

Dec 9, 2008 - 7:14 am 31. Sven:

“Every job you can see that is technology related (nuclear power, electronics, software, etc.) is the direct result of the government being involved”

G Alston: I think you’re confusing correlation with causation.

Dec 24, 2008 - 9:03 am 32. Steve:

G Alston,

You are confusing transferring and creating jobs.

A job is only created when you have a profit, our government can not profit.

So our government can not create a job, becuase they must take someone elses profit.

However the government can increase the profit:
By letting us keep more of our proffit,
Or by investing in large scale things that decrease costs, or increase productivity, and thus increasing the public sectors profit.
If the government builds an airport. The building portion will just transfer the jobs out of another sector. However this allows an airline to staff and employ people who need the service.
The jobs are still created in the private sector.

A side note
Bagnell Dam and Lake of the Ozarks is owned and operated by Ameren UE. Do not say it can not be done through private investing, sometimes permits etc, make it almost impossible.

Feb 9, 2009 - 8:36 am

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