Wednesday, March 4, 2009

Screwing the economic pooch

Not surprisingly, it’s getting popular for the crooks in Washington to favor expensive programs that “create” or “save” jobs. If a program that saved jobs was in itself good for our economy, the best program would be one that hires people to dig holes with spoons and fill them up again. Such a plan would not be capital intensive, so nearly all of the cost would go directly to the employees as salary. Who would honestly expect such a plan to be a good thing?

The fact is that number of jobs created is probably the worst single measure of a program's economic impact. The number of jobs created has little or no correlation to how a program will benefit society. As a matter of fact, wages paid are a cost to society, not a benefit. Hopefully, some of the infrastructure produced by that labor will prove to be a benefit, but the wages paid are clearly a cost. Unfortunately, it’s very easy for politicians to support programs that put people back to work regardless of what benefit comes from that labor. This almost certainly means that the wild-ass spend frenzy will result in a high cost for low benefit.

I predict that Obama will be as disastrous for our economy as Bush was for foreign policy.

9 comments:

jim adams said...

F.M, would you explain why " wages paid are a cost to society, not a benefit"

I accept that the wages are a cost, but when those receiving the wages are members of the society, the wages benefit the society.

Thanks.

Freemarket said...

If giving money freely to people as wages benefits society, then social welfare programs would be an economic boost. I don't think that is the case. The benefit comes from what the jobs produce.

jim adams said...

This is not free money, by definition wages are payment for services renedered.

I agree that benefit comes from what the jobs produce, but the wages for services benefits the person receiving the wages, as well as those who receive payments from the wage earner.

There is no free lunch.

The biggest problem with a recession/depression is that money stops flowing between parties.

If the money fell from the sky, and was received by the multituds, and not by a select few the economy would experience an up turn, because of the give and take by the masses.

PZGURU said...

Jim,

You act as if most/all of the so-called government services are needed and/or benefit society as a whole. Far from reality. Do think it's a great "service" to have 50,000 IRS geeks poring over tax returns and harassing people for as many nickels and dimes as they can get? If the tax code weren't so onerous, people could follow it easier and we wouldn't need all those IRS jerks beating us up.

And, all of these so called "created jobs" like those related to road construction, are TEMPORARY. These are not long term necessity jobs/services.

If Obama and Congress wanted to really stimulate the economy, they could have suspended ALL INCOME TAXES for the entire 2009 year and that would have cost the fed govt. less than the pork-laiden bill that was passed.

I hope you rethink your position because the path we are on right now is disasterous.

jim adams said...

no PZGURA, I wish the gov would abolish IRS, and have a sales tax.

I don't believe gov is always the answer, but i tire of people always complaining.

Thanks for trying to keep me straight.

Anonymous said...

http://www.youtube.com/watch?v=XZC9tMqGRrM


Says it all about our award winning County Exec....

Freemarket said...

Anon 6:36- I agree with most of the stuff in that video, but closing GTV was actually one of the very few good things that Ulman has done, don't you think? I wouldn't add closing GTV to the list of Ulman screw ups.

Anonymous said...

http://www.youtube.com/watch?v=Je0AtZezmyk


FM - Maybe this is more to your liking?

From Anon 6:36

PZGURU said...

Jim - that's a good idea - to get rid of the IRS! I'll vote for you if you run on that platform!