Big government folks on both sides of the political spectrum like to spend your money. It's so common that all of us know that most Democrats and even most Republicans now seem to enjoy spending taxes on their pet projects.
It's an addiction that rears its ugly head time and time again amongst politicians and some of their ravenous constituents and donors. Everyone wants a piece of the pie, and when the government is doling out cash as fast as possible, can you blame the folks who want some of their taxes back, in whatever form?
Unfortunately, a very common misconception is regurgitated by politicians, citizens and even educated economists: Government can create jobs. How, you ask? Well, by stimulating the economy, of course. Some of us are aware now that government spending doesn't create jobs. Just because the government creates a program to encourage people to take their vehicles in to a dealership and have its engine seized up so none of the parts can be used (ever again), doesn't mean that a new job was created. All that did was allow a large auto manufacturer to sell a car. They didn't hire anyone new to make that car. Cash for Clunkers was a gross intervention into commerce by the federal government of the United States. It was also one of the worst things you could do in a time when everyone is "going green." Just think of all those auto parts that could have been reused.
The government attempts to stimulate the economy by sending money it got from taxes (or from creditors) into the economy.
Contrast this with the private sector where demand determines supply. One great example: Apple's iPad. It's a huge success and Apple effectively created the market for it. Sure, tablet computers didn't start with the iPad, but Apple made them mainstream and they did it without any help from the government. Apple didn't "prime the pump" first by sending out stimulus checks. They didn't make an announcement that it's your patriotic duty to spend (remember G.W. Bush in 2001). They simply created a product that they were confident in, marketed it, and watched the coffers fill up.
Daniel J. Mitchell of the CATO Institute wrote an article in 2008 that explains how government really can not create jobs. Mitchell argues that government stimulus, intended to "jolt" the economy by spreading money out into the economy, is actually just taking money from your left pocket and putting it into your right. So, how about unemployment benefits? Where does that money come from? Doesn't it come from the folks that just laid you off? If they had hit hard times but never paid unemployment insurance, might they have enough money to keep you on for a bit longer than they otherwise could? Well, maybe so.
This article, written by Barbara Kiviat of TIME magazine in 2009, starts out with all of the facts straight, then quickly turns a corner and suggests that the Cash for Clunkers debacle was a success. Then, another slight turn back when she doesn't quite give three other ideas her full approval, though, according to her, there's no reason not to try them out.
Itkowitz and Kraus of The Morning Call wrote an article just a couple of weeks ago that outlines well the positions of the two opposing approaches to solving the problem of unemployment.
The fact is that most Democrats and Republicans want to spend all the money they get (and then some), just in different ways. The party that you belong to, in large part, depends on your view of where to spend the cash. Some of us are a bit different. We know from personal experience that money doesn't grow on trees, and it can't really be created just because the Federal Reserve types in a couple more zeroes in their transfers to banks around the country. We know from handling our own finances that we've got to learn to live within our means. And, yes, the same principle DOES apply to the government that applies to us personally. How is it all of a sudden okay to go into massive amounts of debt just to pass that debt on to your kids and grandkids... when you're the government?
Do not forget that the people created the government. "... if we permit government to manufacture its own authority out of thin air, and to create self-proclaimed powers not delegated to it by the people, then the creature exceeds the creator and becomes master." -E. T. Benson
P.S.
"Students of history know that no government in the history of mankind has ever created any wealth. People who work create wealth. James R. Evans, in his inspiring book, "The Glorious Quest" gives this simple illustration of legalized plunder:
"Assume, for example, that we were farmers, and that we received a letter from the government telling us that we were going to get a thousand dollars this year for plowed up acreage. But rather than the normal method of collection, we were to take this letter and collect $69.71 from Bill Brown, at such and such an address, and $82.47 from Henry Jones, $59.80 from a Bill Smith, and so on down the line; that these men would make up our farm subsidy. "Neither you nor I, nor would 99 percent of the farmers, walk up and ring a man’s doorbell, hold out a hand and say, ‘Give me what you’ve earned even though I have not.’ We simply wouldn’t do it because we would be facing directly the violation of a moral law, ‘Thou shalt not steal.’ In short, we would be held accountable for our actions." -E.T. Benson, The Proper Role of Government
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