Unemployment has reached 10.2 percent. That doesn’t include unemployed workers who have abandoned their job search or accepted part-time work. Those two groups would push the unemployment rate to a staggering 17.5 percent. With the Bureau of Labor Statistics Household Survey showing that 3.8 million jobs have been lost since January, no one but President Obama believes that this year’s massive increase in government spending has created or saved 640,239 jobs and the economy would have been even worse without the “stimulus” package. Yet this same administration promised at the end of February that with the stimulus, unemployment this year would only reach 8 percent.
If only it were so easy to create jobs with government spending. For each $160,000, you get an additional job. The administration hopes this cost eventually will average out to just $92,000 per job. But no matter how much money we spend, the government doesn’t create or save jobs.
Put aside the legitimate and well-documented concerns that the recipients didn’t accurately count the number of jobs funded with stimulus dollars. The news media isn’t asking the important question: Where is all this government money coming from? Government just doesn’t create wealth by spending more money. Whether it gets the money from taxation, borrowing or simply inflation because it has printed up more money, government spending moves money from where people would have spent it to places where the government thinks it should go. Jobs created by government come at the expense of the jobs lost when government takes wealth from one part of the economy and moves it to another.
In the short run, the jobs lost are greater than the number of jobs created, and it explains why the unemployment rate has gone up so much faster this year than economic forecasters expected in January. When the government moves money around, it changes where the jobs are. But people don’t instantly find new jobs when they lose their existing ones. Temporarily throwing people out of jobs makes the country poorer, not wealthier.
Even worse, many of these created or saved jobs will disappear as soon as the government subsidies end. All that means more unemployment as people then have to find yet another new job.
Everyone now concedes that further increases in unemployment are inevitable. Mr. Obama’s policies are in place. Each new job that disappears and each new tick up in the unemployment rate clearly rests on Mr. Obama’s doorstep.