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About Obama's Newest Jobs Argument

Obama and his people are trying to distinguish now between private sector and public sector job growth.  The number they have decided to tout is 4.3 million private sector jobs somehow “created” by Obama since he took office.  The argument is, if it wasn’t for cold-hearted Republican officials in state and local governments cutting government jobs, the jobs numbers wouldn’t be so bad.  This was the argument Obama was trying to make in his now infamous comment that, “the private sector is doing fine.”

It is hard to know if Obama is this bad at economics or if he is purposely misleading the public.  Regardless, the argument has little merit if considered beyond its face. 

Since the public sector does not produce wealth, the public sector must rely on taxing the private sector to fund its activities; tax revenues pay the salaries of government workers.  So when the private sector falters, state and local governments have less money to employ people.  Put another way, if the private sector really was “doing fine,” the public sector would be as well.   

What Obama is advocating is a temporary bailout of the public sector—federal money to hire more bureaucrats at the state and local level.  The federal government, however, is also reliant on the private sector for tax revenue.  Even when the feds borrow what they spend, they are stripping the private sector of the capital needed to grow the economy.  And the only way jobs are coming back—in either the private or public sector—is if the economy starts growing again.  My guess is that won’t happen until sometime after November 2012