Can the Government Create Jobs? Reality Check with Jasmine Molton at True North

TL;DR

The government cannot create net jobs through spending, according to Jasmine Molton, because taxation, money printing, and borrowing remove resources from elsewhere in the economy. She argues that highly visible government-funded positions obscure dispersed job losses and other opportunity costs. Read on for her explanation of direct and indirect job creation, taxation, political incentives, and short-term spending.

Transcript

I'm Jasmine Molton and this is reality check reality check is a new show here at True North where we'll equip you with the facts that you need to debunk the most common arguments of leftists in the era of build back better in the postco recovery we've heard a lot from politicians who are really sanguin about their ability to create jobs take a list... Read More

Key Insights

• "the government can only get money in three main ways taxation by printing it or by borrowing it" (1:55)
• "the key here is to really look at opportunity costs" (1:40)
• "nobody spends somebody else's money as carefully as he spends his own" (3:07)
• "in the case of individuals that means that they now have less money in their pocket to stimulate the economy on their own" (2:10)
• "the negative side effects of that are so widely dispersed across the economy it's far more more difficult to point out the opportunity costs" (2:54)

Questions & Answers

Q: Can the government create jobs?

Jasmine Molton argues that government spending does not create net employment because the money must first be removed from the economy through taxation, printing, or borrowing. Although funded jobs are visible, she says the resulting job losses and opportunity costs are dispersed and harder to identify.

Q: How does the government claim to create jobs directly and indirectly?

Direct job creation occurs when the government hires workers, such as hiring a thousand teachers. Indirect job creation refers to spending on projects such as infrastructure, which could generate construction jobs without making those workers direct government employees.

Q: Why does the video say government spending can cause net job losses?

The argument centers on opportunity costs: money spent on government-created jobs is no longer available for individuals and businesses to spend. Molton says the key question is how many jobs were lost because that money was removed from the economy.

Q: What are the three ways the government gets money for job creation?

The transcript identifies taxation, printing money, and borrowing as the government's three main funding methods. It argues that all three create unemployment, although the excerpt explains taxation in the greatest detail.

Q: How can personal income tax affect employment?

Personal income tax leaves individuals with less disposable income. According to the transcript, that means they have less money to buy goods and services that would create jobs.

Q: How can corporate income tax affect jobs and wages?

The transcript says corporations may respond to increased taxation by raising prices, decreasing or stagnating wages, or eliminating jobs. It argues that each response can reduce employment.

Q: Why are politicians attracted to job creation announcements?

The positive results are immediate and highly visible, such as a ribbon cutting or a thousand funded positions. The negative effects are spread across the economy, making the opportunity costs much harder to point out.

Q: Why does the video distinguish government investment from genuine investment?

The transcript cites economist Ricardo Cavero's definition of investing as trading the present for the future. It argues that politicians often do the opposite by pursuing short-term spending that produces benefits now but becomes costly for future taxpayers.

Summary & Key Takeaways

• The content critiques the common political narrative that government spending creates jobs, emphasizing that such claims often ignore opportunity costs and can lead to job losses.

• The discussion highlights how governments misuse taxpayer money in corporate welfare, leading to layoffs rather than job creation, often benefiting large corporations instead of the intended workforce.

• Key arguments presented state that government job creation is unproven, wasteful, and unsustainable, advocating for policies that foster actual business investment instead.