“Job Creation” is THE buzz moving through the media and the political class as the 2012 campaign season starts to gear up. Barry-O is giving us a speech on Thursday about how he will create jobs. Candidates are attacking each other over who has the best “job creation” plan. (Mitt Romney seems to be one of the few major candidates in either party who appears to have a clue on this issue.) The media is already running comparisons of “Job creation” in the George W. Bush and Obama eras.
Let me put on my entrepreneur and professor hats, and break the news to these people: The only jobs politicians can create are within government agencies. For those jobs to be created and endure, they require additional tax revenue from people working in the private sector. As the size of government grows, the demand for extra tax revenue to fund that growth increases. Someone has to be supplying the tax revenue for all of this.
As the number of bureaucrats grows, the amount of regulation and red tape tends to grow as well. When government bureaucratic activity increases, businesses in the private sector get nervous and sit on their money — instead of moving forward on plans to expand their operations or hire new employees. When business activity drops, the amount of revenue coming into government coffers is limited.
When government bureaucracies are created and grown, you are actually stifling growth in the private sector. True, you are creating jobs — government jobs.
But you are running off and squashing the people in the private sector who pay for all of this. Mr. and Miss Reporter — you know that guy FICA who gets a huge chunk of your money each pay period? (Yeah, him.) The money that goes to him and to his friends in state government to pay for these bureaucrats and their agencies. Every government job created shrinks the pool of people in the private sector working to pay taxes to fund the bureaucracy.
If you want to jump-start the economy in this country — cut tax rates, cut regulations, and ease the burden of government on people in the private sector. Despite what Barry-O tells us — Rich people want to invest in their businesses and grow and prosper. When rich people invest their money, the economy grows and people go to work (or keep working).
The next time you hear a nimrod politician, candidate or reporter talking about their or the government’s job creation record — remember that the only job creation the government can actively perform is dangerous to the economic welfare of this country. Every time we have seen economic growth in this country, it has been tied to either: (1) the inability of bureaucrats to enact new policies and regulations, and / or (2) reduction of tax rates and the size of government.