Why Conservatives Think Government Doesn’t Create Jobs

John Maynard KeynesI think that it is important to understand what conservatives mean when they say certain things that make absolutely no sense. The big example of this is, “The government can’t create jobs.” This sounds like nonsense on the face of it. For one thing, it is usually said by some politician and you can’t help but respond, “The government created your job!” But that’s not what conservatives mean when they say that the government can’t create jobs. But don’t misunderstand: they are still wrong. It is just that there is a certain amount of sense in what they are saying.

When Senator Idiot says that the government can’t create jobs, he means that the money that is used for his job comes from taxing people. If that money didn’t go to the government, the tax payers would spend the money and thus create one or more jobs in the private sector. Thus, the government creates a job only by removing a private sector job. This is not a totally stupid idea. There is something to it and under certain circumstances it is even true.

The problem is that, like most conservative economic thinking, it is simplistic. Consider our current economic system where we are very far from full employment. Money is just sitting around not being used. Companies are sitting on piles of cash rather than investing and hiring because demand is so low. In this situation, we could fire Senator Idiot and put the money we pay him back into the private sector by reducing taxes.

In a booming economy, the result would be another job in the private sector for Senator Idiot or someone like him. But in a weak economy like the one we now have, the result would be even more money in the private sector, where it would just sit around doing nothing. So currently, and really, for about the last 13 years, government spending really does create jobs. When government spending does not create jobs is almost never. But there are times. Remember at the end of the Clinton presidency? Remember how Clinton was reducing spending? That was the correct thing to do, because the private economy was buzzing. Personally, I think that if a Republican had been president, he would have continued to spend. But that’s a story for another time.

Even at full employment, when the private sector is booming and businesses are desperate to borrow money to invest and hire, it is fine for the government to take some of that money and hire. There is nothing necessarily better about a private sector job than a public sector job. It is just in this case, you can’t say that the government is creating a job, because the money being used to create that job would be used by the private sector to create a job. But that is very rarely the case.

Now most conservatives don’t even know this much. They are just repeating a talking point. So when you talk to them, you will probably need to educate them as to why conservatives claim that the government doesn’t create jobs. And that’s actually helpful because it gives you some common ground on which to start your discussion, “Yes, the government doesn’t create jobs when the economy is at full employment.” From there, you can talk about all the money that is just sitting around doing nothing in a depressed economy. You can talk about how business owners don’t hire when they don’t have many customers. And before you know it, that conservative will be talking like a Keynesian.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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