This is an important point – and one that all politicians ought to be reminded of, often and firmly.
I am not an economist, so there is no way I am going to articulate this eloquently or even remotely well, but…I would not be myself if I didn’t give it a shot.
There is an old joke – very old – that could get people sent to jail if they said a variation of it back behind the iron curtain, where I grew up:
What is the fastest way to get rid of all the sand in the Sahara desert?
Create a government department with the sole purpose of supplying sand to the Sahara. Give it a steering committee, a 5 year plan and lots of money and power to enforce policies. For a little while, nothing will happen. Then: BOOM! Sand will be more scarce in the Sahara than meat is in butcher shops!
(If you are one of the younger readers who does not remember what life behind the iron curtain was like, let me just say that butcher shops usually had very, very little to offer. If a supply of meat was even rumoured to be coming in, people would stand in lines for hours, sometimes lining up all night just so they may be one of the first few in line in the morning because the supplies were so meager that even with limits per customer, only the first few people in line would get to buy any meat. Bread and milk were usually available, but again, even with bread, the supply would run out before the demand. I remember days when the limit would be set at one quarter loaf of bread per customer, so that my mom would go line up and send me to line upseparately, so we’d get half a loaf between us. No kidding. We had money – but there was no ‘stuff’ to buy with it.)
‘Governments creating jobs’ is one of those easy to fall into fallacies. Like ‘the broken window’ fallacy:
The fact is that governments do not just ‘have money’ to spend: their money comes from taxes, current or future. Taxes are taken from people who earn it by the threat of force: these people now no longer have that money to spend to look after themselves and their family.
Ah, say government spending proponents, but what if people want to save their money instead of spending it? That would be bad for the economy and that is why governments must take it from them and spend it!
Isn’t that just a little oppressive? And arrogant?
A government is supposed to represent the people and do the people’s bidding – not force people to do the government’s bidding!
The suggestion that governments should spend the people’s money because people don’t want to spend it themselves is illustrative of how the relationship between the citizens and our government has been inverted: insted of being our servant, the government has become our master, forcing us to do what we do not want to do.
That we are proposing ‘government stimulus spending’ and ‘government creating jobs’ as desirable actions should give us a moment of pause to consider what this implies about our relationship to our governments and the status of our civil liberties!