THE ESSENTIAL ARGUMENT THAT GOVERNMENTS CAN CREATE JOBS BY FIGHTING CLIMATE CHANGE OVERLOOKS THE FACT THT FIGHTING CLIMATE CHANGE IS NOT AN ECONOMIC ENTERPRISE THAT CREATES WEALTH BUT AN EXPENSE AND THAT GOVERNMENTS DON’T CREATE ECONOMIC WEALTH BUT TAX THE ECONOMIC AGENTS OF THE ECONOMY. THEREFORE, ALTHOUGH IT MAY BE ARGUED THAT FIGHTING CLIMATE CHANGE WILL EVENTUALLY CREATE A BETTER WORLD AND BETTER ECONOMIC CONDITIONS DOWN THE LINE, AS IN “THERE ARE NO JOBS ON A DEAD PLANET”, IT IS NOT POSSIBLE FOR GOVERNMENT TO CREATE JOBS AND ECONOMIC WEALTH IN THE PROCESS OF TAKING CLIMATE ACTION MEASURES. DETAILS BELOW IN TWO ARTICLES BY THE FRASER INSTITUTE AND THE CATO INSTITUTE.

THE MYTH OF GOVERNMENT JOB CREATION. Brennan Sorge, THE FRASER INSTITUTE.

When the government promises to “stimulate” the economy in order to create jobs through government
spending, can it deliver? It cannot, simply due to the reality of the way government funds must be raised, which includes taxes on privately employed citizens and private enterprises that pay for all government spending, including government jobs or employees. The taxes paid by public employees do not raise government revenue per se, but rather reduce government costs, including the government employee’s wage. This is because the government is taxing the very wages that it is paying. In other words, the government uses funds that are not raised through the private production and sale of goods or services. Governments don’t create an asset which is to be sold in order to raise revenue, and are, primarily tasked with supplying necessary services that cannot be provided and financed privately. This includes, for example, a functional military to maintain national security. In some cases the government is better placed to provide certain services than the private sector. But in the framework of “government job creation”, government suffers from both bureaucratic displacement (when unnecessary bureaucracy grows over time, and decreases the efficiency of the affected institution), and the fact that it is moving resources from where the market has determined them to be most efficient, to where the government has decided they would be better used. Government suffers most from bureaucratic displacement as government programs are not held to the same income constraints as private organizations. Government programs can afford to be inefficient as they are publicly funded and face no competition. Because government raises revenue by taking money out of the private economy, it necessarily imposes a tax cost on the very people that will also generate future government revenue. By turning a potential private sector employee into a public one, the government has imposed a cost on itself (the wage it pays), while simultaneously eliminating the potential additional income of a private taxpayer. Government job creation imposes costs on the economy and these costs often take the form of lost jobs in the private sector. If, in creating government jobs, private jobs are lost, then “government job creation” is really just a transfer of jobs from the private to the public sector. Here is the sticking point: by turning a potential private employee into a public one, the government has imposed a cost on itself while at the same time weakening the tax base which is the government’s only source of funds. The government is not an economic enterprise and it does not create economic wealth from which to create jobs. All it can do is to create the right kind of economic policy to create the environment where the private sector can create economic wealth and the jobs that are thus created. The government is tax funded by the income of the citizens and is not a creater of economic wealth or of jobs.

The Myth of Government Job Creation. THE CATO INSTITUTE, 1984 By Thomas J. DiLorenzo

A perennial and admittedly partial “answer” to the poverty problem offered by the Washington establishment is government jobs programs. Such programs are a principal objective of many proponents of an interventionist industrial policy who fear that an alleged decline in the manufacturing sector of the economy will deprive citizens of many well‐​paying jobs, leaving only “dead‐​end” employment opportunities.[2] Expanding the government payroll, so it is said, is a way of avoiding this “problem.” Other advocates of government jobs programs claim that they can not only alleviate the problem of poverty, but also provide such additional benefits as improved environmental and energy conservation, the rebuilding of the nation’s “infrastructure” (i.e. roads and bridges), a stronger national defense, and so on, if only “targeted” correctly by the federal bureaucracy.[3] And the U.S. House of Representatives, just a few days before adjourning in October 1984, voted to appropriate funds to revitalize one of the first government jobs programs, the depression‐​era Civilian Conservation Corps. Throughout 1985 the topic of government jobs programs will be widely and thoroughly discussed in the nation’s high schools, as the issue of poverty has been chosen to be the focus of the 1984–85 annual high school debate competition. One of the main resolutions to be debated is “whether the federal government should provide employment for all employable United States citizens living in poverty.” If the students and others involved in the debates take advantage of the exceptional opportunity thereby provided to learn some basic economic principles, they will discover that it is inherently impossible for government to create jobs; only economic growth in the private sector of the economy can create employment opportunities. Government taxing and spending programs only redistribute existing jobs: taxation reduces the economic vitality of the private economy, destroying jobs there, even though jobs may be “created” elsewhere by government spending on jobs programs. Moreover, the question of whether government should “provide employment for all employable United States citizens living in poverty” revolves around another question, whether it is legitimate for government to benefit one group of citizens at the expense of another. If one believes that government owes its citizens justice and equality of treatment, then it is clear that government has no role in trying to “create jobs” through government jobs programs. But jobs programs are politically appealing. When people are put to work through such programs the jobs are highly visible: workers know their temporary jobs have been doled out by certain politicians for whom they will therefore be more likely to vote. By contrast, the private sector jobs destroyed through taxation (to finance the jobs programs) are much less visible: the unemployed are not likely to realize that it is the higher level of taxation that has placed them on the unemployment rolls. Thus, referring to government jobs programs as a means of “creating jobs” is misleading at best, and dishonest and deceitful at worst. This is not to minimize the problem of poverty, but to suggest that government jobs programs are not the solution and in fact very often make things even worse. The present paper will discuss the economic logic of why governments cannot create jobs and will offer evidence to support this analysis. Special attention will be paid to arguments that are likely to be encountered in the high school debates and to appropriate responses.