Why government spending does nothing for jobs

[Quantum Windbag]

Wait, I thought all the self declared experts were positive that government spending is always a good thing, and that the biggest problem we have right now is that we don't spend enough.

The authors of a June 2013 IMF working paper, “Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?,” answer in the affirmative. After examining data from both developing and advanced economies, Alberto Behar and Junghwan Mok find that a public-sector job comes at the expense of a private-sector job. In other words, paying someone to dig holes and fill them up doesn’t reduce unemployment.

Today’s proponents of increased government spending aren’t necessarily arguing for hiring more government workers, whose ranks have been diminished over the last four years. They do want the federal government to provide some extra oomph to an economy that is barely eking out 2 percent growth four years after the recession ended.

Another dose of stimulus is both unnecessary and counterproductive in the medium and long term. There seems to be widespread agreement -- among academics and economists at the IMF, European Central Bank, World Bank and Organization for Economic Co-operation and Development, if not among the policy setters themselves -- that government spending has a sizeable negative impact on growth.

Why Government Spending Does Nothing for Jobs - Bloomberg

 

[NYcarbineer]

I know that whoever created your job of starting duplicate threads on a topic that has already been thrashed out for a few zillion posts didn't contribute anything to USMB.

 

[Billo_Really]

Wait, I thought all the self declared experts were positive that government spending is always a good thing, and that the biggest problem we have right now is that we don't spend enough.

That's right, consumer spending is 70% of the economy.

The authors of a June 2013 IMF working paper, “Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?,” answer in the affirmative.

That's bullshit! If the government issues a bridge building project, you have private-sector contractors submitting bids to get that contract. And the one who does, has his private-sector employee dig that hole you refer to below and probably has his private-sector sub-contractor fill it back up! So who got crowded out?

After examining data from both developing and advanced economies, Alberto Behar and Junghwan Mok find that a public-sector job comes at the expense of a private-sector job.

That's a crock of shit! If your company is not competitive, then fuck you! Choose another career path.

In other words, paying someone to dig holes and fill them up doesn’t reduce unemployment.

See above.

Today’s proponents of increased government spending aren’t necessarily arguing for hiring more government workers, whose ranks have been diminished over the last four years. They do want the federal government to provide some extra oomph to an economy that is barely eking out 2 percent growth four years after the recession ended.

Another dose of stimulus is both unnecessary and counterproductive in the medium and long term. There seems to be widespread agreement -- among academics and economists at the IMF, European Central Bank, World Bank and Organization for Economic Co-operation and Development, if not among the policy setters themselves -- that government spending has a sizeable negative impact on growth.

When I was 22, I worked on a DOE project for 4 years. That means, for 4 years, I had money to pay rent, food, shelter, clothing, weed plus bitches and ho's. And the people that received portions of my paycheck, spent it somewhere else.

How is that not growth?