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Allow me to apologize for dampening The N&O’s holiday spirit, but I must throw the wet blanket of reality over the giddy cheerleading offered up regarding President-Elect Barack Obama’s economic plans ("Stimulating," editorial, Nov. 25).
Obama received praise because he appears prepared to spend hundreds of billions in order to save or create 2.5 million jobs.
No government on the planet can create jobs. The money must come from somewhere to finance these jobs.
One option is for the government to sell securities to raise the money. Such a move would crowd out capital available for the private sector to invest and create jobs — essentially swapping private sector jobs for government jobs.
The other option would require significant tax increases to finance government jobs, confiscating billions from the private sector. In such a case, any government jobs created would exist only at the expense of a similar loss of private sector jobs.
In either scenario, no net new jobs will be created, and the newly enlarged government will serve to stunt future economic growth.
It may very well be pedal to the metal for the Obama team; unfortunately, they would merely be accelerating the economy’s drive off a steep cliff.
This letter was originally published in the N&O on Sunday, November 30th, 2008
