American Elephants


Tell Your Congressman: Government Spending Does Not Create Jobs! by The Elephant's Child
June 7, 2010, 10:39 pm
Filed under: Capitalism, Economy, Energy, Statism | Tags: , ,


The June Bureau of Labor Statistics employment report announced that net employment increased by 431,000 in May reducing the unemployment rate from 9.9 percent to 9.7 percent.  But not so fast.  411,000 of those new jobs are temporary government jobs associated with hiring for the census.  The private sector jobs only totaled 41,000.

These temporary jobs offset job losses in state governments (-15,000) and local governments (-7,000).  Educational hiring has not been affected.

But: Government spending does not create jobs or prosperity. Every time the government “creates” a job — the salary, the benefits, the office space, the parking spot, and the sign on the door — are funds that come right out of your pocket.  Democrats in Congress cannot seem to get this simple fact through their heads.  The increased government spending that many in Congress propose, will not reduce unemployment because it will do nothing to encourage businesses to invest or hire.

Layoffs have increased during this recession, but that is not the cause of the nearly 10 percent unemployment rate.  The main factor that has driven unemployment so high has been the sharp drop in creation of new jobs.

The biggest drag on the economy is sheer uncertainty.  Employers are unsure of how ObamaCare will affect them, how much it will cost, what steps they have to take.  The taxes and fees from ObamaCare take place immediately, but the benefits don’t occur until much later.  New and increased taxes are coming; how bad it will be is up in the air.  Energy costs will increase.  And regulations!  Congress is making up new regulations as are all the bureaus and departments of government, many of them buried in 2,000 page bills.  Unpleasant surprises waiting to hit the unwary.  This is not a situation that makes a  potential employer rush out to hire new people.

The BP Deepwater Horizon oil rig disaster is creating a nightmare in the Gulf states, and warnings in the press suggest that it could spread up the Atlantic coast.  As the oil reaches the beaches, jobs in shrimping, fishing, tourism, restaurants and all the industries that support those jobs are at risk.  President Obama ordered the rest of the rigs in the gulf shut down — unnecessarily, we are told — which may cost up to 10,000 jobs.

The Democrats latest $143 billion “jobs” bill (Stimulus 3.0) will add at least $84 billion to the deficit.  An extension of jobless benefits, bailout funds for state governments and their unions, lots of earmarks, and $43 billion of tax increases.  The spending is partially funded through an increase in the “Oil Spill Liability Trust Fund” tax.  There are provisions in the bill that will drive jobs and corporate headquarters overseas.  And no real analysis of the economic impact of the bill.

There is almost no one in the administration that has any experience in the private sector.  I don’t know what private-sector experience members of Congress have had, but I do know of a lot whose resumes consist almost entirely of “public service.”



Obama’s Debt Commission is Going Into Debt! by The Elephant's Child

President Obama’s answer to a knotty problem is to — quick — appoint a commission.  That will show not only how serious he is, but will leave it to others to examine the evidence and probe the possibilities.  And “a commission” sounds so responsible.  He has just appointed a commission to investigate the oil spill. Maybe they can get some prompt answers from the EPA.

But it appears that President Obama’s Commission on Fiscal Responsibility and Reform better known as “The Debt Commission” is (snicker) running out of money.  The president’s bipartisan fiscal commission is operating on a shoestring budget and some panel members and lawmakers worry that it may well run out of money.

The 18-member commission is tasked with coming up with proposals, by December 1, that will find ways to control the federal government’s trillion-dollar budget deficit.  The panel’s own budget, however, is only $500,000, barely enough to cover office rent and the salaries of four staff members.

And though the White House and Treasury have loaned the panel experts from their own payrolls, and several think tanks are helping as well, the total full-time staff currently is only about 15 people and not expected to exceed 20. Money is so tight that the commission recently abandoned hopes of holding field hearings around the country to gather views from outside of Washington.

The commission had wanted to have “field hearings around the country” to gather concerns and ideas from a wide range of constituencies.  This is a lovely idea, but the reasons for our fiscal problems are not a mystery.  And the solutions are not unknown.  They could probably get by with a short trip to New Jersey and a consultation with Governor Chris Christie, but of course he is a Republican.  And there are any number of Republicans in Congress who have solid ideas.

We spend way too much money on bloated government budgets, overpay government employees by comparison with their private sector peers.  We have too many agencies, boards and dare I say commissions, and we keep adding to them.  We keep shoveling money into entitlement programs without restraint.  And Obama’s efforts to “fundamentally change America” in ways that Americans don’t want it changed are, of course, the major source of the debt.  The American people want real action, the Obama administration provides theatrics.  If politicians in Washington do not have the political will to do what needs to be done, then they need to be replaced.

The Heritage Foundation offered some guidelines.

  • Move Toward Historical Levels of Taxes and Spending
  • Bring Long-Term Solvency to Social Security and Medicare and Reform Medicaid
  • Reopen the Health Care Law
  • Offer Specific Spending Reforms, Not Just Numerical Targets
  • No New Taxes or Tax Increases
  • Bring Budget Transparency

Not a bad list.

ADDENDUM: I changed the headline on this post.  I just liked this one better.




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