It seems to us, that the only job an elected politician can create is a government job, one that necessarily requires reducing the funds available in the economy by taxation to pay its wage. The new job in government has diminished private enterprise jobs. That doesn’t seem like creation.
Folk like to claim that money spent by government is a ‘multiplier’ that funds successive layers of economic activity as it is spent and respent in the economy. But to say that, one must ignore the initial removal of that money from the economy via taxation. When government spends, it is only returning what it initially took away. How is that creative? We don’t understand that.
It is true that such government takings end in transferring the taken money from its original owners to politically selected new ones but as political goals are not economically motivated, we cannot see how such transfers create any new wealth. (We see altogether too well how they can create corruption though.)
We feel reinforced by the acknowledged Father of Economics, Adam Smith who felt similarly in 1776. His politicians were not happy with his opinions nor are those today; “Butt out!” doesn’t go down too well when you wish to use other people’s money for your purposes.
This fraud was exposed clearly by a Frenchman who wrote in 1850 about a broken window. Said damage was seen as an economic opportunity that would benefit not only the glass dealer and the laborer who installed the new pane but also all those who in turn received the money that they were now, because of the shattered glass, able to spend.
Bastiat pointed out that all this optimism ignored the loss sustained by the window’s owner, who had to apply his money to repairs instead of using it to expand his business or invest in his future. And as Bastiat noted, after spending for the repairs, the window’s owner was no better off than he had been before. The supposed economic gain from the repair spending was offset by the preceding loss. And as the the supposed gain was fraudulent and the loss was real, the idea of economic gain from such events is a fraud.
Nevertheless, government economic stimulus continues to be sold by politicians to voters who never heard of Frederic Bastiat. Certified by their tame economists. And the related overspending and unsustainable debt continue under the currently Republican Congress, picking up from the previous overspending and unsustainable debt provided by the preceding Democrats.
From 1850 too 2016 is some 166 years but we still seem not to have learned …