"Make-Work" Jobs Don't Create Real Wealth

Two annoying features of both 2009's "Stimulus" bill and the "jobs" bill that was defeated in the Senate last night, is that they seem to be "make-work" bills.

Let's pretend, for the sake of argument, that...

...it is prudent and constitutional for the federal government to fund infrastructure and education, and to give aid to the states.

This would mean that if a bridge needs to be rebuilt, the federal government should rebuild it. If a school needs more teachers, the federal government should hire them, or at least provide the funding for them.

It is the same for police or defense. If we really need more cops on the street, they should be hired. If we really need a new submarine, it should be built.

By the same token, however, if...

  • the bridge isn't needed, it shouldn't be built.
  • there are too many teachers or cops, some should be laid off.
  • the submarine won't keep the country any safer, there should be no contract to construct it.

Government services should serve the people.

Even if government ought to have a more expansive role in society, it should still be run economically.

It shouldn't hire any more personnel than is necessary to provide the services. It shouldn't hire people for the sole purpose of keeping the unemployment numbers low. And it shouldn't embark on "make-work" projects to keep workers artificially busy.

That's because everyone else suffers when The State does unnecessary things with non-essential staff. Not only do taxpayers have to fund these extra salaries, they are also denied the use of financial capital and natural resources that government consumes. For instance...

  • The engineers employed improving the advanced technology in an unnecessary submarine could instead be employed providing better high-tech consumer goods
  • The materials used in building an extra bridge could instead be used for private construction projects

In other words, resources would be diverted from UNproductive to productive use.

But what would happen to the people who are laid off if the government starts cutting budgets? Shouldn't we be concerned for their welfare?

Yes, but we shouldn't have to be too concerned.

  • If the State passes the savings to the taxpayers, those taxpayers would use their greater take-home pay to expand the voluntary economy.
  • The State could also reform its tax and regulatory structure to make it easier for businesses to hire people.

But even if the transition takes longer than I want, I would still rather have fewer government employees. At best, they waste dollars doing make-work. At worst, they do harm.

Many people believe our infrastructure is crumbling and our schools are underfunded. If that's true, then the WORST POSSIBLE argument for funding those items is that they will create "jobs." Federal funding of any program should be debated in terms of constitutionality and necessity, NOT on how many jobs will be created or saved.