After wasting three years and more than a trillion dollars of "stimulus" money, the President has announced he has a new plan for creating jobs.
The problem is: Government doesn't create jobs that add value to the economy; companies and entrepreneurs do. Through taxes, mandates and regulation the government typically discourages hiring and destroys jobs. What Washington should do right now is step aside...
Entrepreneurs create jobs only when they expect the price they will receive for their product or service will exceed the price they pay for labor and other inputs, such as raw materials and equipment. This ensures that the jobs they create make society wealthier.
In contrast, government jobs add little if anything to the economy. They drain resources rather than increase them.
Truth be told, the government easily could solve unemployment tomorrow if our only objective is to say that everyone who wants a job has one. It could do this simply by hiring half of all unemployed workers to dig ditches and the other half to fill them in. Everyone would work. But no net value would be created.
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