The Occupy Wall Street crowd claims to stand with the 99% against the 1%. A conservative news service points out that the 1% earn more than $506,000 a year. But when it comes to figuring out legitimate government policy, we are not characterized sufficiently by our income. In fact, our income ought to be as irrelevant as race, religion, sex, or sexuality in government policy. Making it as important as it is commonly made is highly materialistic. Note that it is the socialist left that makes the most of income and in that shows its lack of spirituality and its extreme materialism.
Is it not odd that if a man takes the risks of owning his own company and works 70 hours a week and therefor someday may make a higher income than a man who takes a nice, safe 40 hour a week job as an employee and who watches TV for 30 hours a week, the hardworking businessman is taxed more? The businessman is required to be an unpaid tax collector, is held responsible for all of his employee's safety, is forced to pay for the unemployment of employees whether they ever worked for his company or not, and is supposed to see to it that his company complies with more than 200,000 pages of often-conflicting regulations or suffer crippling fines. The businessman may very well have 45 hours of his life each week taken by force from him for government purposes. The employee is more likely to have only 6 or 8 hours of his life claimed by government each week. These hours taken by force are the equivalent of slavery.
By what right does government enslave one man for many more hours a week than another? Worse yet, the government really only does it for the same reason that Willy Sutton robbed banks. That is where the money is. It just is not easy for the government to figure out how to take anything it wants out of the 30 hours a week our hypothetical employee is watching TV. The government simply wants to steal and it is easy to steal from the hardworking businessman, whether it is his mandated service to the government collecting taxes, complying with regulation, or as safety inspector and provider, or the money he earned with his time. The government is clearly just Willy Sutton.
It is absurd that people spend so much time characterizing themselves in terms of their income. Legitimate government has the sole purpose of protecting the equal, sovereign individual rights to life, liberty, property, and the pursuit of personal happiness. As far as government policy is concerned there are only two numbers that characterize each of us. They are 1 and 0.0000000032. You do know what the later number is, do you not?
Charles R. Anderson, Ph.D. is a materials physicist, self-owned, a benevolent and tolerant Objectivist, a husband and father, the owner of a materials analysis laboratory, and a thinking individualist. The critical battle of our day is the conflict between the individual and the state. We must be ever vigilant and constant defenders of the equal sovereign rights of every individual to life, liberty, property, self-ownership, and the personal pursuit of happiness.
Core Essays
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20 October 2011
07 October 2011
Obama Jobs Bill Will Kill Jobs
The Obama Jobs Bill is supposed to cost $447 billion, create as many as 1.9 million jobs according to economists who have already proven they have no clue, and increase the GDP by 2%, again according to those same clueless economists. Let us examine the effects of the Obama Jobs Bill in a simple and rational manner.
The GDP in 2011 is estimated to be $15.012 trillion. Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy. Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs. If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward! Apparently some us are just too timid to do this. But Paul Krugman would be happy to push us into it. OK, so yes, I do not believe this is the way the economy works for a minute, or even a second. But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.
First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP. That is more than the 2% growth of GDP claimed to result from this expenditure! In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air. The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.
But, it gets worse. Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263. This comes from dividing $447 billion by 1.9 million jobs. We can compare this number with the cost of the jobs we presently have. Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs. At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011. So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs. Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea. It is a great way to bankrupt America and many of its families.
Now, some economists believe in magic and they will disagree with me on what I am about to point out. When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create. Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors. He will create some union jobs to build and repair infrastructure. He will maintain some teaching positions for the teachers unions in public schools. He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products. Obama will try to point out the jobs created, so this is what will be seen. What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector. Obama is counting on our failing to see those jobs die.
What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another. Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money. In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.
Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama. We can easily calculate the number of jobs that will be killed. These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out. The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.
As I said, it gets worse. Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women. But it is the way the wrongheaded Obama wants badly to drag the country. It is Obama who will throw most of us off the cliff.
Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama. This would only be justice to pay back the injustice done to Paul Ryan.
The GDP in 2011 is estimated to be $15.012 trillion. Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy. Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs. If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward! Apparently some us are just too timid to do this. But Paul Krugman would be happy to push us into it. OK, so yes, I do not believe this is the way the economy works for a minute, or even a second. But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.
First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP. That is more than the 2% growth of GDP claimed to result from this expenditure! In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air. The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.
But, it gets worse. Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263. This comes from dividing $447 billion by 1.9 million jobs. We can compare this number with the cost of the jobs we presently have. Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs. At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011. So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs. Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea. It is a great way to bankrupt America and many of its families.
Now, some economists believe in magic and they will disagree with me on what I am about to point out. When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create. Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors. He will create some union jobs to build and repair infrastructure. He will maintain some teaching positions for the teachers unions in public schools. He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products. Obama will try to point out the jobs created, so this is what will be seen. What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector. Obama is counting on our failing to see those jobs die.
What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another. Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money. In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.
Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama. We can easily calculate the number of jobs that will be killed. These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out. The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.
As I said, it gets worse. Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women. But it is the way the wrongheaded Obama wants badly to drag the country. It is Obama who will throw most of us off the cliff.
Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama. This would only be justice to pay back the injustice done to Paul Ryan.