Friday, December 23, 2011

Can government create jobs?

The conservatives on the radio say no and evidently a lot of people believe them. Reality is a lot different. 'Government' as such doesn't build factories and it doesn't deal in production and distribution, but it has a profound effect in job creation by stimulating demand for private industry to produce and distribute, and that production and distribution entails the need for workers. The National Defense Highway System under Eisenhower is my favorite example. Taxes were collected, mostly gas taxes, but there were other taxes as well. Private firms were hired and cash money was distributed. The Army Corp of Engineers drew up specifics. Private contractors went to work moving dirt. Tens of thousands of people were hired. Every tax dollar 'spent' was re-spent at least seven times. People miles removed from actual road construction were employed to keep track of materials. Lawyers, bankers, stock brokers and accountants went to work. Factories built heavy equipment....sub contractors, 'small business', were hired by 'big business'. Concrete was produced and shipped via newly invigorated trucking companies. Rail cars were built and manned. New trucks were ordered. Workers bought work clothes and steel toed shoes. Steel produced and delivered. Electrical equipment was manufactured and installed. Trash was hauled. Rivers were bridged. Towns sprang up. Business opened. All of the tax money that began this chain of events became salaries, savings, profits, investment capital and finally taxes. Anyone who says this didn't happen exactly that way is kidding you. Government takes little bits of cash, consolidates it into a mive pile of cash and transforms that into a power house economic activity. 'Government' ordered a mive number of computers right out of the gate...that industry is still with us because of this economic kick in the pants. Consolidating cash and spending it. Pretty much that's all government does, but it's a major part of the economy. Government money...the bits and pieces of dollars and cents that we call taxes gets spent, but it doesn't vanish into thin air, though without this influx of capital except for local economies the overall economy would disappear. The Space Program.....still going, though now as much private industry and money as government input. Even Homeland Security as redundant as it is spends billions buying, from private contractors...and ALL of that money gets re-spent time after time. 'Government workers', currently shat on by the right wing commentators spend their paychecks on the local economy. Currently we need more government spending...a mive 'Stimulus'...such as building up a solar and wind economy and building up a 21st century high speed freight and penger service....not to mention replacing much of our 50 to 100 year old infrastructure. Government tax money...private contractors. I'm sure some of the responders will totally misunderstand this....that's the power of bad information. Still....

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