Tags: alan | Blinder | government | Spending | Destroy | Jobs

Blinder: Govt Spending Doesn't Destroy Jobs

Thursday, 23 Jun 2011 08:24 AM

Economist Alan Blinder says the idea that government spending destroys jobs is dead wrong.

"The generic conservative view that government is 'too big' in some abstract sense leads to a strong predisposition against spending," Blinder writes in The Wall Street Journal.

"But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies?"

"For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?"

House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending," Blinder notes.

“Think about that for a minute,” Blinder says. “The claim is that employment actually declines when federal spending rises.”

“Using the same illogic, employment should soar if we made massive cuts in public spending — as some are advocating right now.”

It is easy, but irrelevant, to understand how someone might object to any particular item in the federal budget — whether it is the war in Afghanistan, ethanol subsidies, Social Security benefits, or building bridges to nowhere, Blinder points out.

“But even building bridges to nowhere would create jobs, not destroy them, as the congressman from nowhere knows,” he says.

“To be sure, that is not a valid argument for building them. Dumb public spending deserves to be rejected — but not because it kills jobs.”

Gaebler.com reports that the U.S. Conference of Mayors has called on the federal government to stimulate domestic job creation.

Unemployment rates could reach double-digits in three-quarters of the 363 metro areas considered in the annual U.S. Metro Economies report by the end of this year.

The report predicts 69 metro areas will have double-digit unemployment as late as the end of 2012.

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Economist Alan Blinder says the idea that government spending destroys jobs is dead wrong. The generic conservative view that government is 'too big' in some abstract sense leads to a strong predisposition against spending, Blinder writes in The Wall Street Journal. ...
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2011-24-23
 

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