Sunday, July 31, 2011

Stimulating Government Employees

Umm, is this blog still on? Of late I've been reading Henry Hazlitt's Economics in One Lesson online. It's full of money quotes with which I will regale you repeatedly.

Even though the stimulus bill of 2009 was sold as a "shovel-ready jobs" bill, a lot (most?) of the money has gone to shore up existing federal agencies and programs or was sent to states to support state budgets. Here's Hazlitt on why using money to retain government employees (whether you think that's a good idea or not) is unlikely to "stimulate" the economy:
The country is not merely as well off without the superfluous officeholders as it would have been had it retained them. It is much better off. For the officeholders must now seek private jobs or set up private business. And the added purchasing power of the taxpayers, as we noted in the case of the soldiers, will encourage this. But the officeholders can take private jobs only by supplying equivalent services to those who provide the jobs—or, rather, to the customers of the employers who provide the jobs. Instead of being parasites, they become productive men and women.

4 comments:

  1. I love parasite green, it goes with my eyes.

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  2. I know right! Anyway, I'm a member of the much vilified "govt. employee" class myself. The key word in that paragraph is "superfluous." I doubt any govt. employee would describe their own position as superfluous. Still, I think the fact remains that once govt. moves beyond providing an ordered environment for contracts, commerce and protection of life, liberty and property govt. employees become a drain on society. For example, my own job, professor, could probably be outsourced to the private sector rather easily.

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  3. Private for-profit universities exist (like University of Phoenix) , and they make money, so there must be demand for it.

    They don't provide the same benefit to society that public universities do, though.

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  4. Is that because they are being "crowded out?" I've often wondered if my community college could by privatized. The govt. funding could go to the private entity and they could be charged to do the same things we're doing--and they'd probably do it cheaper.

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