Friday, June 3, 2011

The Burden of Thrift

Are you sitting down? Good... Here are two excerpts (the first one's a killer) from Friday's AP article Bleak Jobs Report Dampens Hopes of Steady Growth:

Heidi Shierholz, an economist at the liberal Economic Policy Institute, expects employers to add about 150,000 jobs a month for the next few months. Up to 300,000 new jobs a month would be needed to significantly drive down the unemployment rate. "What we need is more government spending to create jobs. The 2009 stimulus package is largely spent", she said...

White House economist Austan Goolsbee said the burden is now on the private sector. "You've seen corporate profits high," he said. "It's now time to get that translated ... into the adding of jobs, building of factories and buying of equipment here at home."

Make sense? Really? I am forever struck by how those who should know better (the likes of the two aforementioned academics) lose sight of the fact that, in the end, increased government spending equates to increased taxes and/or higher inflation and interest rates. I.e., the government can only spend that which it ultimately takes from the private sector. Therefore the private sector, knowing that it'll ultimately pay the government's tab, has no choice but frugality... The burden (of thrift) is indeed now on the private sector...

If Ms. Shierholz gets her way, I’m afraid Mr. Goolsbee is going to be sorely disappointed… Apparently neither has had much in the way of private sector experience…

1 comment:

  1. You hit on the head Marty. It is amazing that these experts fail to recognize that it is the private sector (you and me) who ultimately pay for any and all government spending. If we are going to increase our conribution (the burden they refer to) then it is only fair that we decide what to spend it on and not the politician.