Dec 11, 2008

Public vs. private allocation of money

Is government policy of spending public money to create jobs a good thing? I bet you that most people think that it is. For instance in United States right now, the government is using public money (either tax money or by creating inflation using the Federal Reserve to print the money) to save the autoindustry and all the jobs that are dependent on them.

First off, if people aren't willing to buy Ford, Chrystler or GM cars or invest by buying their stocks, then why should they be forced by the government to do it?

Second, when the government is using people's money to create jobs somewhere, they are taking away money that the people would have used some other way, that would have created jobs naturally somewhere else.

But people can see the people at work in the autoindustry. They see pictures in the newspapers. They can  see the cars that are made. What they can't see is the jobs and goods that are not allowed to come to existence.

Using public money to create jobs destroys private jobs somewhere else.

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