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free trade & free markets too much government

Multiplication and Division

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John Maynard Keynes’s most popular notion was his infamous “multiplier” effect. Spend some government (taxpayer) money, and the effects “multiply” in the economy, as if the Invisible Hand were on speed. 

The truth is the reverse: “the divider” effect. Create government jobs and progress in the marketplace “divides” as a result of the increased taxes needed to support the jobs. 

Our orator-​in-​chief also says he’s in the business of “saving jobs.” Like most politicians, he loves “multiplier” talk, because it gives him the green light to spend.

But, like the bank bailouts, what’s really happening with stimulus spending is that some people are getting raises and bonuses while the unemployment rate goes double-digit.

The actual multiplier effect regards talk. For every dollar government spends, politicians claim umpteen more jobs “saved.” It’s not reality. The multiplication effect occurs entirely in rhetoric and in PowerPoint presentations. 

The New York Times tells us how “the federal government spent $1,047 in stimulus money to buy a rider mower” for a cemetery in Arkansas. Then, “a report on the government’s stimulus Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.”

The magic of this sort of job creation doesn’t rest upon the logic of markets. Here the magic lies simply in the lying. The “multiplier” multiplies because politicians tell multiple lies.

This is Common Sense. I’m Paul Jacob.

3 replies on “Multiplication and Division”

White House spokesperson/​place/​thing Robert Gibbs points out that when it comes to that URGENTLY NEEDED “stimulus” money, don’t just look at how much they’ve spent (a third or a fourth of it?); you gotta consider how much money they have “obligated.”

Yeah, seems like an honest mistake to me. They thought they needed the money, but decided that they needed obligations even more.

Where’s “helicopter” Ben B when you really need him dropping the bucks on the people instead of saving up for a rainy obligation? If you’re gonna take the money and run, at least drop some from time to time as you run! Maybe stop for a smoke or something.

I note that 7 SEIU workers (including the local union prez) “voluntarily” resigned after raising a big stink because some cub scout working for a merit badge had cleared a path in a park somewhere, which the union claimed was THEIR job. 

What happened to all this “volunteer” stuff Obama was talking about? (Like, how much does it pay?) Wonder if that influenced their “volunteer” work at resigning? Seven in one fell swoop! (And a chance to use the expression “one fell swoop.” How nice.)

If someone had told you two years ago what was going to happen this year, just how crazy would you have thought this person to be?

Government can only “create” tax consuming “jobs”. Therefore, the more “jobs” government “creates” the more you can expect poverty and mediocrity.

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