And government can NOT “create jobs.” Here is why. At any given moment, there are only a certain (fixed) amount of resources–steel, lumber, machine time, man hours, etc. So, when government decides to do one of its “make work” projects, all it does is draw those resources out of private sector projects. Consequently, no jobs have been created but large amounts of wealth redistribution have taken place.
by Frank Shostak at the Mises Wire
According to many commentators, outlays by government play an important role in the economic growth. In particular, when an economy falls into a slower economic growth phase the increase in government outlays could provide the necessary boost to revive the economy so it is held.
The proponents for strong government outlays when an economy displays weakness hold that the stronger outlays by the government will strengthen the…
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