Can Gvt create or cost jobs

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seymore
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Can Gvt create or cost jobs

Post by seymore » Sat Nov 10, 2012 4:51 pm

I must admit that Economic affairs are not my strong point so i was wondering if you here that are more based in the econ -mind-set could clear this up for me.
I have heard from the days of my youth( second Truman admin) that government can't create jobs and this has been a recurring theme in the last few years here in the states. this never generates debate among the right wingers her so it must be accepted by them as a statement of fact.
On the other hand they have stated that the budget cuts associated with the looming "fiscal cliff" will cost thousands of jobs in the defense industry. This by the same group that maintains that government can't create jobs which brings me to the question at hand: If government can't create jobs why do budget cuts cost Jobs? If you econ types can explain this issue to me I'd appreciate it .
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Re: Can Gvt create or cost jobs

Post by OlegTheBatty » Sat Nov 10, 2012 8:49 pm

seymore wrote:I must admit that Economic affairs are not my strong point so i was wondering if you here that are more based in the econ -mind-set could clear this up for me.
I have heard from the days of my youth( second Truman admin) that government can't create jobs and this has been a recurring theme in the last few years here in the states. this never generates debate among the right wingers her so it must be accepted by them as a statement of fact.
On the other hand they have stated that the budget cuts associated with the looming "fiscal cliff" will cost thousands of jobs in the defense industry. This by the same group that maintains that government can't create jobs which brings me to the question at hand: If government can't create jobs why do budget cuts cost Jobs? If you econ types can explain this issue to me I'd appreciate it .
If a contractor hires workers to build a bridge, does it really matter who is paying the contractor? Government might be, or maybe a larger corporation that expects to make a profit from tolls. Either way, the workers are hired.
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Re: Can Gvt create or cost jobs

Post by Eric D R » Sat Nov 10, 2012 11:42 pm

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Re: Can Gvt create or cost jobs

Post by Darkling » Wed Nov 21, 2012 7:07 am

The government does create jobs through taxation which could cause some private sector job losses. I think what they're trying to say is it would eliminate jobs without creating additional or replacement jobs. To that I say it depends on what the saved money would be used for.

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Re: Can Gvt create or cost jobs

Post by Ron L » Sat Dec 01, 2012 3:31 am

"If a contractor hires workers to build a bridge, does it really matter who is paying the contractor?"

Yes, for at least two reasons:
1) Voluntary transactions always increase wealth; if you buy a shirt, you get a shirt you value more than the money you spent and whoever sold the shirt got money they valued more than the shirt. Both parties in the transaction got increased value.
The money removed from a person by taxation is not voluntary, hence the 'transaction' results in a loss in wealth. So the taxes used to pay for a gov't-funded bridge have already cost wealth.
2) The bridge in question may or may not be something that should be built. Gov'ts are notoriously poor at making that decision; see, oh, Solyndra. Any private funding source, using investor money, is going to look very carefully at whether that particular bridge is of economic value.
Either alternative will pay the workers for the construction, but gov't decreases wealth from the git-go and likely does in the result.
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Re: Can Gvt create or cost jobs

Post by OlegTheBatty » Sat Dec 01, 2012 10:24 pm

Ron L wrote:"If a contractor hires workers to build a bridge, does it really matter who is paying the contractor?"

Yes, for at least two reasons:
1) Voluntary transactions always increase wealth; if you buy a shirt, you get a shirt you value more than the money you spent and whoever sold the shirt got money they valued more than the shirt. Both parties in the transaction got increased value.
The money removed from a person by taxation is not voluntary, hence the 'transaction' results in a loss in wealth. So the taxes used to pay for a gov't-funded bridge have already cost wealth.
2) The bridge in question may or may not be something that should be built. Gov'ts are notoriously poor at making that decision; see, oh, Solyndra. Any private funding source, using investor money, is going to look very carefully at whether that particular bridge is of economic value.
Either alternative will pay the workers for the construction, but gov't decreases wealth from the git-go and likely does in the result.
Your understanding of economics is a black hole - information may be going in past the event horizon, but nothing comes out.
. . . with the satisfied air of a man who thinks he has an idea of his own because he has commented on the idea of another . . . - Alexandre Dumas 'The Count of Monte Cristo"

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.......................Doesn't matter how often I'm proved wrong.................... ~ bobbo the pragmatist

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Re: Can Gvt create or cost jobs

Post by Ron L » Sun Dec 02, 2012 1:53 am

OlegTheBatty wrote:
Ron L wrote:"If a contractor hires workers to build a bridge, does it really matter who is paying the contractor?"

Yes, for at least two reasons:...
Your understanding of economics is a black hole - information may be going in past the event horizon, but nothing comes out.
I won't bother to comment on your "understanding" of econ, other than NWS.
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Re: Can Gvt create or cost jobs

Post by Martin Brock » Sun Dec 02, 2012 2:08 am

Ron L wrote:"If a contractor hires workers to build a bridge, does it really matter who is paying the contractor?"

Yes, for at least two reasons:
1) Voluntary transactions always increase wealth; if you buy a shirt, you get a shirt you value more than the money you spent and whoever sold the shirt got money they valued more than the shirt. Both parties in the transaction got increased value.
The money removed from a person by taxation is not voluntary, hence the 'transaction' results in a loss in wealth. So the taxes used to pay for a gov't-funded bridge have already cost wealth.
2) The bridge in question may or may not be something that should be built. Gov'ts are notoriously poor at making that decision; see, oh, Solyndra. Any private funding source, using investor money, is going to look very carefully at whether that particular bridge is of economic value.
Either alternative will pay the workers for the construction, but gov't decreases wealth from the git-go and likely does in the result.
Well put.
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Re: Can Gvt create or cost jobs

Post by Tom Palven » Wed Jan 02, 2013 10:08 am

Why is unfree, government-encumbered .enterprise always viewed as preferable to free enterprise? We now have evidence for this alleged superiority God says so.

http://www.huffingtonpost.com/2013/01/0 ... 92653.html" onclick="window.open(this.href);return false;
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Re: Can Gvt create or cost jobs

Post by Martin Brock » Wed Jan 02, 2013 8:48 pm

Government can create jobs, but creating a job and creating wealth are not equivalent. If government creates a job without creating any corresponding wealth, then the job holder must consume other wealth, and others therefore must consume less. All job creation is not a zero-sum game in this way, and job creation in a free market is rarely a zero sum game, because a free person rarely pays another person to do nothing of value to the payer. At least, we don't call these payments "jobs". We might call them "gifts" but not "jobs".

No law of economics implies that a government cannot create a job creating wealth, but centrally planned, command economies have a poor track record compared with market economies, and the reasons are not difficult to understand. Where more government jobs exist, less wealth per capita exists, so the question is not: can governments create jobs? The question is: do we want governments creating jobs or do we want more wealth?
People associating freely respect norms of their choice, and relationships governed this way are necessarily interdependent.

More central authorities conquer by dividing, imposing norms channeling the value of synergy toward themselves.

"Every man for himself" is the prescription of a state, not a free community. A state protects the poor from the rich only in fairy tales.

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Re: Can Gvt create or cost jobs

Post by OutOfBreath » Thu Jan 03, 2013 7:47 am

I always thought the concept of wealth was more or less analogous to value. It seems it isn't, from reading here.

How is wealth different from value? And why is it intrinsically better? It tastes a bit like political dogma to me so far.

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Re: Can Gvt create or cost jobs

Post by Tom Palven » Thu Jan 03, 2013 10:48 am

OutOfBreath wrote:I always thought the concept of wealth was more or less analogous to value. It seems it isn't, from reading here.

How is wealth different from value? And why is it intrinsically better? It tastes a bit like political dogma to me so far.

Peace
Dan
Okay, here's a starting point, perhaps. When the Federal Reserve and Treasury Dept act to provide "quantitative easing" (Goodthink wording for the historical term "currency debasement") and they essentially print a lot of money, as did the Weimar Republic, the US Confederacy, Zimbabwe, Rome, etc, they have created a lot of money, but have they created any wealth? Okay, wealth is not necessarily a lot of greenbacks or government bonds, as you say, it is something of value.

And money is useful insofar as it can be exhanged for something of value. If a government, in order to create higher employment statistics or to "create jobs" pays a group of people to shovel sand from one pile into another, and pays another group of people to shovel it back, no wealth has been created. And if the govenrment pays the MIC billions of dollars to build war machines that on one can eat, drink, sleep in, or enjoy in any way, it has just pissed away billions of dollars of other people's wealth reserve and created none. And when put into use, the only thing those war machines are capable of doing is destroying wealth, unlike, say, a power plant. Correct? How about you take it from here. How do you define wealth?
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Re: Can Gvt create or cost jobs

Post by OutOfBreath » Thu Jan 03, 2013 12:27 pm

Well, Tom, what you say seem to correspond to my understanding that wealth=value.

However, earlier up in the thread statements were made (not by you I think) to the effect that building a bridge one way generates wealth, while building it another doesn't. Even if in both cases the same bridge stands there afterwards (aka value).

Which is why I ask what wealth is in that context, since it clearly isn't value, or at least not value alone.

To me it sounded suspiciously like baking certain morals into economic concepts which doesn't add any explanatory power to the concepts. I'm suspicious of the use of the term wealth in general, which is why I prefer to use value and avoid discussing "wealth" at all. Unless someone can tell me why wealth is different from value in any meaningful way.

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Re: Can Gvt create or cost jobs

Post by Martin Brock » Thu Jan 03, 2013 2:03 pm

OutOfBreath wrote:How is wealth different from value? And why is it intrinsically better? It tastes a bit like political dogma to me so far.
I don't know how you distinguish "wealth" from "value". "Wealth" is what a person desires more than something he already possesses (like his labor). A person will exchange "wealth" for some standard of value, like an ounce of silver. What traders will exchange for this standard is "wealth" of roughly equivalent value to the traders (slightly less value for one trader and slightly more for the other), only because we agree that the standard itself is "wealth", i.e. the free exchange itself is the measure of "wealth".

"Value" in this sense is an arbitrary convention. The "value" of an ounce of silver is an ounce of silver. If silver is also our standard of value, then the "value" of another good is the amount of silver that people will exchange for the good.

In a market, we can abstract the value of a particular good, like a bushel of corn, from individual preferences, i.e. we can speak of the "market value" of corn relative to silver without reference to particular traders, because arbitrage leads to a market price, in a given market at a given time, that traders generally accept. The willingness of traders to exchange silver for corn differs from trader to trader, but trade actually occurs only at the market price. Traders unwilling to trade at the market price do not trade silver for corn or vice versa.

Although each individual decides what he will pay for a bushel of corn in ounces of silver, the "market price" of corn is an emergent property of the corn within the market, reflecting an equilibrium between the demands of people with silver (or good credit) desiring corn and people with corn desiring silver (or promises of silver).

If a government pays me ounces of silver, collected from tax payers, to dig holes and refill them, then after I've spent a day digging holes and refilling them, I have a day's wage in silver which I may exchange for the corn of people who spent their day harvesting corn instead. Other people will accept my silver for corn at the market price, but I haven't actually produced anything for them to consume. The silver itself does not signal the production of any good, because the government did not exchange a valuable good for the silver.

When the government obtains silver through taxation, it breaks the relationship between silver as a standard of value and silver as a signal of productivity. The government could pay me to produce goods valued by other producers, as opposed to digging holes and refilling them, but when the government raises taxes to pay me, my possession of the silver is not itself evidence of this productivity. If I am a corn producer instead, and if I possess an ounce of silver that others have exchanged for corn I produced, then my possession of the silver is itself evidence that I have produced a good that a market values as much the silver.
Last edited by Martin Brock on Thu Jan 03, 2013 10:13 pm, edited 2 times in total.
People associating freely respect norms of their choice, and relationships governed this way are necessarily interdependent.

More central authorities conquer by dividing, imposing norms channeling the value of synergy toward themselves.

"Every man for himself" is the prescription of a state, not a free community. A state protects the poor from the rich only in fairy tales.

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Re: Can Gvt create or cost jobs

Post by Tom Palven » Thu Jan 03, 2013 2:45 pm

OutOfBreath wrote:Well, Tom, what you say seem to correspond to my understanding that wealth=value.

However, earlier up in the thread statements were made (not by you I think) to the effect that building a bridge one way generates wealth, while building it another doesn't. Even if in both cases the same bridge stands there afterwards (aka value).

Which is why I ask what wealth is in that context, since it clearly isn't value, or at least not value alone.

To me it sounded suspiciously like baking certain morals into economic concepts which doesn't add any explanatory power to the concepts. I'm suspicious of the use of the term wealth in general, which is why I prefer to use value and avoid discussing "wealth" at all. Unless someone can tell me why wealth is different from value in any meaningful way.

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It seems like you and Martin agree that wealth and value are the same thing. That's fine with me, I don't disagree and am not qualified to quibble with that, anyway.

But regarding the bridge. Yes, the bridge may be of value whether a government or a private group builds it, or it may not be of much value. such as "bridges to nowhere." Money from either investors or money coerced by taxation can be used to build bridges of value or useless bridges, but it seems that private investors are usually more careful with the use of their own money than the average politician is with your or my money. Policians often build things just as "make-work" projects in their home towns or home states.
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Re: Can Gvt create or cost jobs

Post by Lance Kennedy » Wed Jan 16, 2013 10:41 pm

Of course governments can create jobs. Governments can also cause the loss of jobs. Governments are very powerful. Good government can result in a country that is thriving. For example : Singapore. Bad government can result in a country that falls into the pits of poverty. For example : Zimbabwe.

There is a lot of bullsh!t talked about on this topic. Extreme right wingers believe very firmly that the best government is no government, or at least, minimal government. In fact, that is wrong. The best government is competent and non corrupt government. Good government sets up the conditions for job and wealth creation. Being good is not dependent on being small. It is dependent on being competent and benevolent.

Of course, right wing people and left wing people have different definitions of what is 'good' in government. Fodder for lots of arguments!

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Re: Can Gvt create or cost jobs

Post by Tom Palven » Sun Feb 24, 2013 3:42 pm

I'm no fan of George Will, but like they say, even a broken clock..., and imho he's right on target here, and somewhat amusing, to boot:

http://www.washingtonpost.com/opinions/ ... _headlines" onclick="window.open(this.href);return false;
If one can be taught to believe absurdities, one can commit atrocities. --Voltaire
I may not agree with the what you say, but I will defend your right to say it. --Voltaire
Mankind will not be free until the last king is strangled with the entrails of the last priest. --Denis Diderot
I haven't abandoned my vices. My vices have abandoned me. --Denis Diderot