How can increasing government jobs or increasing wages at government jobs stimulate the economy?

The Fed Up Matthew™: How can increasing government jobs or increasing wages at government jobs stimulate the economy?
If to pay that government worker the government must create more money (diluting the value of the dollar) or take the money from other people (taxes)?

Am I missing part of the equation stimulus believers?

Answers and Views:

Answer by Ed
You are missing more than just part of, you are missing most of it.

Answer by Bob Loblaw
If the private sector isn’t going to do anything then the public sector must. I would much rather have companies start hiring again but since they refuse, what other proposal do you have?

Answer by kadiss17
It cannot, they are creating more debt obligations for the taxpayer.

Answer by Wake Up and Stand Up
People who have paychecks from the government pay taxes on them and then reinvest them into the economy.

Answer by Justine 2
A big reason so many States are in fiscal problems is because of entitlements owed to government workers . Now how can adding even more government employees solve the problem ?

Answer by elkdevel
It can’t. The only thing that will fix the economy is lower spending and a rise in the GDP. We need to get products being made in our country again.

Answer by oohhbother
Employed people spend more money than unemployed people – buying goods and services from businesses that are not government run.

If you had not noticed, our states and local governments are also running under decreased revenue – so this increased commerce also goes back to all levels of government: federal, state, and local, in the form of tax revenue.

Answer by Françoise
1933 Unemployment: 25%
1943 Unemployment: 2%

Answer by Little Ben
The more people have jobs the less the number of unemployed, so Obama looks good. Now what they do and what they get paid that’s an other story.

Answer by Robin
in spite of the name
it is not the economy that is being stimulated
it is the marxist agenda

i believe that the pres believes that he is ushering in a better thing
but i believe that he is intentionally ruining the american economuy
and intentionally circumventing the constitution to do it

obama is a man-child of narrow perspective and experience

he has no tool in his experience to fix this

the country is about to re-set

let us hope it survives

Answer by USA Male
Gov employees dont need a raise if thats what your talking about?? They are the highest paid employees now such as a postal worker at $ 20+ an hour. best benefits, retirement all paid by the taxpayer. Those 535 no gooders callled Congressman fair better yet at $ 175,000 a year for 88 days of work. BTW 1/3 of them we are voting out this year!!

Answer by vertical and dangerous
Good question!

Government ‘expansion’ is always a drain on the economy!

Government jobs do not create, they consume!

Only Business can create and that is simply and utterly Factual!

Answer by suthrnlyts™
It doesn’t. This is a Liberal’s dream come true, because it creates yet more and more government dependency. Wanna keep your job? Better vote for the progressives!

And to the person who appears to think that the private sector isn’t willing to supply jobs. Think again! They’re hurting too and if they’re not hurting, they’re deathly afraid of hiring because they don’t know what lies in the future. Will ‘card check’ go through? Will Cap & Trade go through? Will VAT go through? If you had a small business, would you be willing to blindly take chances, not knowing what you’re going to face six months or a year from now?

Answer by Toxicpanduh #2
The theory is that Government “borrows” the money from others (via selling bonds) and goes into debt during an economic down turn. That money is used to “temporarily” hire new Government employees that have lost their job. Since they now have a job, they can afford to buy goods in the market, hopefully steadying demand for goods / services.

The problem we have as a Nation is that this theory requires the U.S. to have “good times” & to pay off previous debt loads & to insure the jobs ARE temporary. We all know this isn’t true. Government has continued to grow and these become permanent Federal Employees. Our National Debt hasn’t been payed down in ages, growing every year even when Clinton had a small “surplus”.

We can’t afford neo-conservatism anymore than we can afford a very generous social programs but people refuse to see it.

Answer by Shovel Ready
The goal is to increase dependence on the government and reliable Democrat voters.

Answer by nicky b
Economic cycles occur over a relatively long period of time. For political reasons they keep trying to control natural economic cycles by controlling the money supply. It may seem to work in the short term but long term it seems detrimental. Not to sure we know what we are doing. Its going to be interesting to see how this is all going to turn out, to see if the current administrations policies,
are effective. In the end it seems one thing is almost certain the Dem’s are going to blame the reps and the reps are going to blame the Dem’s and the rest of us will be broke as usual. Somebodies going to be making big money over all this but if the dollar keeps falling then we will all sort of be in the same boat. Economics can become kind of confusing.

Answer by J P
People who focus on “jobs” are missing the boat. Normally, these are unions and other special interests. Jobs only create wealth if they increase overall productivity.

On a visit to China, Milton Friedman was touring a vast, public works project where a massive excacation was being dug by thousands of workers using shovels. He asked, “why not bring in heavy equipment?” The Chinese responded, “because this project provides jobs for many thousands of our workers.” Friedman replied, “if it’s about jobs, why not use spoons?”

A nation does not become wealthy by using 1,000 people to do the work that could be done by a few. The economic output is the same, either way. That’s something to think about when listening to Dems talk about the “new energy economy,” for example. They’re basically saying, “let’s use spoons… think of all the jobs.”

Answer by Huh?
You are very confused. The stimulus doesn’t create jobs by adding individuals to the government payroll. Thinking that is a clear indicator of how little your understanding of stimulus money.

Lets assume the funds are going to build a new court house in Anywhere, Wyoming. The local government doesn’t hire construction workers to build the court house, the put the project out to bid. A construction company bids the job and a local company then has a new job. The company hires subcontractors to perform some of the work, including plumbers, electricians, landscapers, etc. They purchase materials for the job, steel stud, concrete, windows, doors, etc. The people on the job, the guys in the steel mills, the guys in the plumbing supply house , none of these are government employees, but the project has provided all of them work that they wouldn’t have had.

Now the owner of the construction company has made a decent profit on this project so he goes out and buys a new Ford pickup, and after working so long and hard the electrician takes his family on vacation, one of the workers is able to catchup on his mortgage and avoids foreclosure. This multiplies the impact of the stimulus.

No new government employees were hired. No government employees were given raises. The stimulus funded the hiring of private contractors.

Answer by Paul Grass™
It can’t, government employees normally are over paid and inept in my opinion. The costs of governmental agencies have always with out exception have been much higher than projected, and it takes away from the private sector every time as well.No sir you’re not missing a thing, you have it down, it is the left who is missing a course in real life economics in my opinion

Answer by L.T.M.
What a mess huh.

It depends on what the goal is. If you’re promoting more dependence on government it’s a great idea.

If you’re concerned about long term economic health and individual freedoms then it’s poison to the system.