To Create Jobs, Government Should Get Out of the Way!

Date: 10/25/2010

Government and Job Creation

by Ron Paul

As the current economic downturn shows no signs of lifting, we hear quite a lot of rhetoric from current and potential office-holders about what government can and will do to create more jobs. This is especially disconcerting to those who understand that the best thing government can do for job creation is to simply get out of the way.

Jobs are properly created by businesses. Government-created jobs are either fueled by fiat money and manipulated market conditions or directly funded by taxes paid by businesses and individuals who then have less to hire people for real wealth creation. Government-created jobs destroy wealth and sap potential from the economy. The several stimulus bills passed by Congress have done much to expand government but not much to keep money in the hands of real job creators — the entrepreneurs.

Keynesian economists don’t see things this way. They see government spending as a stop gap measure that tides us over through rough economic patches. But is this really the case?

Far from it. The reality is instead of sustaining us until the economy can catch up, government spending perpetuates the problems the bureaucrats and the politicians created. Maintaining a high level of employment is one of the main objectives of the Federal Reserve, which is just one reason it is ill-conceived at its very core: it legitimizes economic intervention which is always destructive. When unemployment rises after the bust of a Fed-created bubble, you can be sure Congress will attempt to rescue the economy through various policies that will always prolong the agony and expand the downturn.

In the late 90’s, it was thought that encouraging home ownership would have a stimulative effect that would ripple throughout the rest of the economy and create jobs. Various government policies favorable to home ownership were enacted and the Fed kept interest rates artificially low so everyone would be able to buy a home, whether or not they could really afford it. For awhile, it worked. The housing boom increased demand for realtors, mortgage lenders, and construction workers. However, as reality sank in, not only are we back to where we were when the bubble began, but we are actually worse off. For example, not only have we lost all of the one million extra construction jobs the bubble created, but we lost another one million on top of that! So not only did the artificial wealth evaporate, but real wealth has been destroyed as well.

Even more sinister are jobs created by war. Recent reports highlight the increasing dependence on contractors to support our war efforts in Afghanistan. Massive corruption is endemic to these highly lucrative positions. Almost half of the contracting companies we use are Afghan owned and include such business models as recruiting away the very same Afghan police force we are training at great expense to the American taxpayer. Meanwhile we have pledged not to leave until the police force reaches a certain level. We also bribe many Afghans to simply not attack us. We are in a proverbial hole in Afghanistan. Our leaders need to just stop digging.

Neither a Keynesian big spending program, nor the military-industrial complex can create long-lasting employment or economic prosperity for our country. The only way to restore both peace and prosperity is to draw down our overseas commitments, along with unconstitutional spending at home and return to the founders’ vision of a limited republic that neither straddles the globe, nor micromanages the domestic economy.


  • ExposeRPforWhatHeIs

    He will always vote to let big business run without any restrictions

    He will always vote to let crimes committed by big business go unpunished. After all, government should get out of the way.

    He will say that many government agancys should be dismantled. No matter how many millions of people get shafted by do this. No matter how many people lose their lives. No matter how many. Government should not be in the way.

    He will never get my vote. Never.

    • jamieson

      Correct me but there will be watch dog organizations that do just as much if not more auditing for corporate business practices than federal agencies. We know that many members of the US government are working for the benefit of corporations, losing those individuals won’t hurt us, the people any.
      You are right, businesses may have more leverage over states in many respects without federal oversight. To argue your stance that people will lose jobs and be in danger without gov’t to protect us, I know less gov’t equals more responsibility for individuals like you and me to protect ourselves from such businesses many of us can count on state representatives and community organization for support.
      My argument is federal fat from bureaucratic spending and supporting military outposts across the world will put much needed money in the possession of the states lessening their dependance on others to bail themselves out of debt. I do see the benefit of, for example, making education regulated by the fed but again, there are so many worthless employees working for the government that scramble the good intention of whatever program existed. For one, the desire to work ones way out of a job by succeeding at it does not appeal to all at all times.
      My father is an Obama supporter saying the Patriot Act and NDAA aren’t important because we don’t do anything wrong and we won’t be affected. I been to Afghanistan and seen what Afghans get caught in- all citizens can be suspect of aiding the Taliban in the blink of an eye. Seen in the location at the time, any one can be suspect. Shit happens here too and it happens too often that people have to prove themselves innocent -not the other way around. Getting locked up for smoking weed or having an out of control addiction is not justice.
      Ron Paul isn’t going to change everything but his message of government transparency and exposing those behind the curtains is one that speaks to me.
      Hope to hear back your thoughts, God bless.

  • He has never voted to raise taxes.

    He has never voted for an unbalanced budget.

    He has never voted for a federal restriction on gun ownership.

    He has never voted to raise congressional pay.

    He has never taken a government-paid junket.

    He has never voted to increase the power of the executive branch.

    He voted against the Patriot Act.

    He voted against regulating the Internet.

    He voted against the Iraq war