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The late Noble Prize winning economist Milton Friedman once stated:
When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it…And when a man spends someone else's money on someone else, he doesn't care how much he spends or what he spends it on. And that's government for you.
Milton Friedman’s words ring true for the $814 billion government “stimulus” passed in February 2009. The city of Los Angeles is a prime example of government recklessly spending these “stimulus” funds. According to City Controller of Los Angeles Wendy Greuel:
LADOT [Los Angeles Department of Public Works] has been awarded $40.8 million and created or retained 9 jobs, though they are expected to create 26 jobs overall. Overall, the Departments have received $111 million in federal stimulus funds out of the $594 million the City has been awarded so far and created or retained 54.46 jobs.
In other words, it has cost taxpayers a whopping $2 million to create or “save” a single job. Wendy Greuel who is disappointed in the jobs numbers claims that “the City needs to do a better job expediting the process and creating jobs.” Even if the Los Angeles government unlikely meets their goal of creating 264 jobs, the price tag would still be over $400,000 per job.
Politicians cannot “give” us anything without first taking from someone else. Every dime of the $814 “stimulus” was either taking away from taxpayers or borrowed out of the economy. As Milton Friedman noted, individuals tend to spend their money wiser than government does. Therefore, the real key to economic growth is through the private sector.
So why not allow taxpayers to keep more of their money to stimulate the economy by wisely purchasing goods and services that they desire? Even though Los Angeles’ government spent $111 million creating jobs, this had barely any positive effect on unemployment. In fact, Los Angeles’ unemployment rate has increased by over 2 percentage points to 12 percent since the “stimulus” was enacted. We are unable to visibly see the abundance of jobs that were likely not created due to “stimulus” spending. Imagine how many jobs could potentially be created if taxpayers had their hard earned $111 million in their pockets instead. To be sure, the private sector would likely create significantly more than 55 jobs as a result.
Today, President Obama stated that “we've got the most dynamic free-market economy in the world. And that has to be preserved.” At the same time, Obama is pushing for yet another massive $50 billion government “stimulus” package that will likely be mismanaged. In order to truly preserve our free-market economy, we cannot allow another "stimulus" boondoggle to pass. The best solution to boost job growth is to get government out of the way to allow free people to voluntary exchange goods and services without harmful government interference.