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    Voodoo Economics Pt 2: Government Doesn't Create Jobs

    In a recent report, the Congressional Research Service revealed that welfare spending has increased by 33% under Barack Obama, topping out at over $1 Trillion annually. As I pointed out in my previous post on the report, baseline spending on social programs has deliberately been driven up by the Obama administration, despite (or perhaps due to) the fact that they have failed to pass a budget in nearly four years.

    Table 2 in this report revealed something that should be obvious, but is lost on Keynsians and the bureaucrats who rely on their arguments to justify their existence. A classic argument from the Left is that in order to fix our economy, we must invest in education and job training. The logic goes a little like this:

    1. Train unemployed people for a new job
    2. Tax corporations and the rich to pay for it
    3. Funnel the money through government bureaucracy
    4. ???
    5. NEW JOBS ARE CREATED!

    For those of us living in the real world, it seems obvious that merely increasing the pool of available workers might not be sufficient to create jobs. In fact, the Employment and Training section of Table 2 reveals just that:

    Employment and Training Spending, 2009-11 (In Millions)

    Note the increase in new obligations in worker training programs:  $22.8 BILLION from 2009 – 2011. Meanwhile, in that same period, the workforce participation rate has dropped from 65.6% to 63.6%.

    Not to put too fine a point on it, but this is the lowest workforce participation rate since Ronald Reagan was cleaning up Jimmy Carter’s economy. You remember that – an economy so bad that a new word, stagflation, had to be invented to describe it.

    This should disabuse anyone of the notion that government creates jobs. Of course, the inherent conflict of interest that exists in the halls of government dictates that they have to sell themselves as essential to the public interest, lest bureacrats’ paychecks vanish and they be forced to survive in the free market.