The Stimulus Emperor Has No Clothes
The the U.S. Bureau of Labor Statistics has reported that public sector jobs started to fall in September as private sector employment growth continued to be sluggish. While the unemployment rate held study at 9.6 percent, government shed 159,000 workers while the private sector added an anemically positive 64,000.
Finally, the numbers are showing the stimulus emperor has no clothes. Spending alone can’t drive economic growth; at best it can bridge the economy until real productivity in the private sector picks up and companies start to rebuild inventories for goods and services based on sustainable demand. Unfortunately, the modern Keynesians in the White House either forgot about the overriding importance of supply side for long-term growth, or, more likely, they simply dismissed it. Unfortunately for the millions of unemployed and under employed, the Obama’s White Houses continued emphasis on aggregate demand strategies, ignoring the supply side consequences of higher taxes, regulatory uncertainty, and unfocused fiscal policy, is likely to reinforce sluggish performance in the economy.
— Samuel R. Staley is Robert W. Galvin Fellow and director of Urban & Land Use Policy at the Reason Foundation.