[Continued from home page: Government and jobs] There is no question that government creates a large number of jobs. It can tax or borrow money and hire legions of unemployed people to shovel dirt on the side of the road. If you look at the gross number of jobs created at the roadside, this policy may look successful.
But if you consider the jobs lost by taxing or borrowing the money — the opportunity cost to producers and consumers who otherwise would have used those scarce resources — then there may well be no net jobs created.
Still, what really matters is not the number of jobs created but instead what economic value is added from the activity. If the workers are adding lanes to a congested highway, that creates value.
Commuters and truckers will move more quickly and safely than before. But if half the workers are digging a trench down the side of the road and the other half are filling in the trench behind them, there is no value created.
The economy takes a deadweight loss. When government performs its limited responsibilities well, it creates economic value — and net new jobs. For example, the adjudication of disputes and the protection of lives and property create a foundation for business confidence, investment, and job creation.
When policymakers reform existing government programs to improve their effectiveness, or eliminate ineffective programs altogether, they also maximize economic value and, thus, create net new jobs.
Most government job creation the Left wants, however, has the opposite effect. It destroys economic value and results in net job losses. Even in areas where properly structured government programs can add value, such as infrastructure improvement, today’s programs are so poorly conceived that routing more tax dollars into them to “stimulate the economy” is a fool’s errand.
Government exists to perform a small number of discrete tasks that are difficult to perform through voluntary means. Beyond that, government is a liability, not an asset — and one that needs to be removed from our balance sheets. [Editorial from the Carolina Journal, September 2011