Government Stimulus Only Stimulates Government

The following article from Justin Williams at the American Liberty Group points out the long term decline in US productivity that occurs as more jobs continue to be created in less productive government vs private sector jobs.

GOVERNMENT’S NEGATIVE EFFECT ON THE LABOR MARKET

By Justin Williams
On the first Friday of every month, the Department of Labor through the Bureau of Labor Statistics releases the current number of unemployed workers in America. Often times as with both George W. Bush and Barack Obama, politicians expand federal employment to lower that number and create the false illusion of real job creation.
As, pundits and economists debated on whether government spending would bring us out of the current “Great Recession,” one thing was for sure: the number of federal employees would increase. And even though government jobs were created and some people were no longer unemployed, new studies show that the real result of all this Potemkin Village-building is a long-term negative economic impact.
Economists Matthew Higgins, Andrew Young, and Daniel Levy have found that, when looking at sample data in the United States from 1970 to 1998, there is a negative correlation between creating government jobs and real economic growth. And that includes all federal, state, local government offices.
A large part of the problem, of course, is that public spending crowds out private spending. Or in other words: every dollar the government spends is one more dollar being bid away from private industry.
And this goes for employment too. Every employee the government hires is one less person for the private sector to employ in productive jobs. Now, of course, if the government was just as efficient and productive as the private sector then this would not be a problem.
But this study’s result show that productivity decreases, not increases, when more federal employees are put on the taxpayers tab. Due to lack of proper price and profit structure, government misallocates resources, produces an inferior product – and runs up the deficit all at the same time.
Yet, as bad as that is, it gets even worse.
Within every single category of government employee (federal, state, and local), government wages grew much faster than non-government wages. For example, in the chart below, the difference is over 30 percent in every case. The worse example is local government employee’s wages. Throughout the U.S., they increased at a rate of 70 percent higher than non-governmental wages.

This type of wage gap makes it hard for the private sector to compete with the government for employees. Not to mention the other benefits that go along with a government job, including job security, more benefits, and the bureaucratic axiom that anything short of taking a nap is “close enough for government work.”
In other words, every time a new future employee enters the labor market from college, high school, or anywhere else, there is more of an incentive for them to take a government job than a private sector job. And this, in turn, adds to the country’s burgeoning productivity loss – at astronomical prices.
So finally, the only solution that can be offered here is to eliminate many of the unnecessary government jobs that already create an overwhelming amount of red tape and higher taxes.
But sadly it seems that this administration’s policy will do more to expand government jobs than eliminate them. And with that, the Obama White House will cause an enormous amount of productivity losses for generations to come – all the while touting its bogus record for “job creation.”
Justin Williams is the Senior Commentary Editor of ALG News Bureau and as always he takes questions and comments on the Barstool at justin@getliberty.org.

Audiences Mesmerized by Obama's Arguments!

Trying a new technique and spin on his "Hope" theme, President Barack Obama has recently been able to get audiences to completely agree with almost anything. Recent polls are showing that people that have watched an Obama speech are in complete agreement with his statements and are no longer confused by his rhetoric. Listeners now agree with statements such as:

"Government knows how to spend your money better than you do"

"Trillion dollar deficits are the best way to get spending under control"

"Government Healthcare will be cheaper, better and more available than the current system"

"Everyone loves the Post Office and it couldn't be better"

While questions are still being asked about just how the President has been able to accomplish such an astounding job of persuasion, an audience member at a recent speech got a shot of Obama in action.

Involuntary Medical Servitude? - Say No

Very interesting article on Government "mandated" healthcare and implications on market options and freedom.

Involuntary Medical Servitude

Mises Daily by Maria Martins

http://mises.org/story/3657#

Raise the Deficit by $1.6 Trillion/Save $100 Million: What a Deal!

Obama is the Man. He dug and dug and came up with savings in the Federal Budget from every nook and cranny. After holding all his Departments' feet to the fire they came up with "savings" - which of course are things they should ALREADY BE DOING - of a staggering 0.006% of the Federal budget deficit. This is like the average family increasing their spending by taking out a $50,000 loan and then "tightening their belts" by finding "savings" of $3.

Does Obama know how to cut out waste and inefficiency or what?

WEDNESDAY, JULY 29, 2009

Obama Completes $100 Million Budget Cut

Maybe Obama can use this as a promise delivered. After proposing to increase government spending by trillions of dollars, several key agencies succeeded in Obama's "challenge" of $100 million in savings - or 0.006% of the budget deficit.

Three months ago, President Barack Obama ordered his cabinet secretaries to find $100 million in budget cuts for the current fiscal year to emphasize the point that he, too, was serious about belt-tightening. They responded with $102 million. That is 0.006% of the estimated federal deficit.

The list of 77 spending cuts, which the White House is calling "the $100 million savings challenge," reflects the vastness of government -- and its vast inefficiency...

The Air Force has proposed replacing its specially formulated jet fuel with commercial aviation fuel, which it will top up with some military additives. That will save nearly $52 million next year, when the program begins.

The Office of Thrift Supervision, a division of the Treasury, identified unused phone lines costing $320,000.

By increasing the number of soldiers traveling on each airplane chartered for rest-and-relaxation leave, the Army will save $18 million in the next few months. The Navy will save $5 million a year by deleting inactive Internet accounts to configure their computer networks more cheaply.

The Justice Department estimates it can save $573,000 through fiscal 2010 by setting up its printers and copiers to use both sides of the paper. By emailing some documents instead of printing them out, the Department of Homeland Security will save $318,000.

Both Homeland Security and the National Highway Traffic Safety Administration have pledged to take the same step that has sent the newspaper industry into a tailspin: They will start getting their news online free, rather than renew their subscriptions. Homeland Security will save $47,160, or 0.0000026% of the deficit.

The Coast Guard realized that maintenance schedules for its 1,800 small boats assumed they were for recreational use such as water-skiing or bass-fishing. By adjusting maintenance schedules to reflect what the Coast Guard actually does, the agency discovered it can save $2 million a year.

The Federal Emergency Management Agency is going to save $3.8 million by refurbishing and reusing or selling its emergency trailers -- like the ones provided to people displaced by hurricanes -- instead of ditching them.

Congratulations - great job, Obama. You are the cost cutting president, indeed.

Raise Your Hand to Pay for Insurance You Don't Want!

Here are some interesting factoids about the impact of state "mandates" on the cost of insurance and other facts about the amazing efficiency of government health care . Aren't you glad government bureaucrats are making sure you have the insurance coverage THEY want you to have. Cause after all, they are smarter than you aren't they?

Raise your hand if you want to pay $850 higher health insurance premiums to cover in vitro fertilization ?

By kenhoma

Some interesting factoids from a noted Harvard professor …

* * * * *

Through the Medicare and Medicaid programs and state government regulations, it sets the prices paid to providers, determines who is covered for what in its insurance plans, and requires that certain benefits are included in insurance policies.

But, some consumers may not want expensive ‘Cadillac’ health plans that pay for acupuncture, fertility treatments or hairpieces …

The government of Massachusetts, for example, requires 52 benefits, including in vitro fertilization, a benefit that raises the price of every family’s health insurance by $850 or so.

But, some consumers may not want expensive ‘Cadillac’ health plans that pay for acupuncture, fertility treatments or hairpieces …

* * * * *

Despite the government’s regulation of the prices, coverage, and benefits in Medicare, the program has incurred a $38 trillion liability– a sum equivalent to nearly three years of the nation’s Gross Domestic Product.

The country’s 87 private insurers’ general and administrative expenses are 5 percent, a percentage lower than Medicare’s.

40 percent of doctors refuse to see Medicaid recipients due to its stringent provider payment rates. Increasingly, physicians refuse to see Medicare enrollees too, for similar reasons.

To compensate for the government’s shortfall in payments to providers, enrollees in private health insurance have been forced to pay about $90 billion more annually.

* * * * *

Source: RCP, Government Should Get Back to the Basics on Health Care, August 22, 2009
Regina E. Herzlinger, McPherson Professor at Harvard Business School and author of “Who Killed Health Care?’(McGraw Hill, 2007)

Obama Care: Maine Leads the Way

A case of study of the consequences of Obama Care is unfolding in Maine.

It's not Pretty. To read it all, see:

No Maine Miracle Cure

Another state 'public option' that failed.

http://online.wsj.com/article/SB10001424052970204619004574322401816501182.html?mod=djemEditorialPage

Obama Care and the Soviet Experience

I encourage you to read the article "What Soviet Medicine Teaches Us"

by Yuri Maltsev. It can be found at http://mises.org/story/3650#

It provides first hand information of what happens when the State has control of Health Care.

Be afraid. Be very afraid.

Famous Presidential Quotes

""Those who deny freedom to others, deserve it not for themselves; and, under a just God, can not long retain it."

- Abraham Lincoln

"A government is like fire, a handy servant, but a dangerous master."

- George Washington

"And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country."

- John Kennedy

"Concentrated power has always been the enemy of liberty."

- Ronald Reagan

" Happiness lies in the joy of achievement and the thrill of creative effort."

- Franklin Roosevelt

"We cannot build our own future without helping others to build theirs.”

- Bill Clinton

"There is something about August going into September where everybody in Washington gets all wee weed up!"

- Barack Obama

Obama Gets A Pay Grade Promotion - Now Partner With God

During the Presidential campaign, Barack Obama and John McCain participated in a debate at Saddleback church with Pastor Rick Warren. Both candidates were asked the question of when life begins. McCain unhesitatingly replied he believes life begins at conception. Obama replied that whether it was on a scientific basis or a religious/moral basis it was "above his pay grade" to be able to answer that question.

Well, times have changed. Obviously Obama has gotten an increase in pay grade.

This week President Obama was speaking to various rabbis and said, "We are God's partners in matters of life and death."

Well, that's interesting. At least he didn't say God is HIS partner in matters of life and death. Or was he just referring to himself in the third person?

Apparently Obama has gone from too low a pay grade to be able to have an opinion on when life begins to being a partner with God in making life and death decisions. He is certainly on the career fast track. Just a few years as a State Senator, less than a year working as a US Senator, less than a year as President and now already promoted to God's Partner. Shows what hard work and a Biblical size ego will do.

One wonders if in saying he is a "partner with God in matters of life and death" he is trying to bring God down to the level of mortals or whether he is elevating himself to the level of God.

Is there really a question here?

Obama-Speak: Government Health Care Option Will be Inefficient Like the Post Office so It Will Provide Competition for The Private Sector!

Besides implementing policies that are almost certain to cause staggering inflation and (already) astronomical deficits, President Obama recently displayed that his talent for bold tactics and "change" also extends into the arena of communication and logical thinking. The following is a transcript of his spontaneous talk at a high school. A student raised a question about the government's provision of health services and its impact on private services. He replied.....

"How can a private company compete against the government? My answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining, meaning that taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services, and a good network of doctors, just like private insurers do, then I think private insurers should be able to compete.

They do it all the time. If you think about it, UPS and Fed-Ex are doing just fine. It's the post office that's always having problems … there is nothing inevitable about this somehow destroying the private marketplace. As long as it is not set up where the government is being subsidized by the taxpayers so that even if they are providing a good deal, we keep having to pony up more and more money."

OK. I admit it, I'm kind of an "old school" guy and obsessively cling to dogma like "if A is B and B is C then A is C". I probably am just not progressive enough to appreciate an argument where Obama contradicts and destroys his first talking point with his second.

He basically says that to provide competition for the private sector we need to have an inefficient, poorly run Government option. Gee, who could compete with that? But perhaps this is not the case. Perhaps the inefficiency will be covered up and subsidized by the people's taxes.

Maybe he just thinks his audience is stupid and isn't following his rhetoric. Nah, that's not possible. Is it? Or maybe HE really doesn't understand what he is talking about. Maybe?

Let's analyze Obama's statement some more. First he says:

"How can a private company compete against the government? My answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining, meaning that taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services, and a good network of doctors, just like private insurers do, then I think private insurers should be able to compete"

Obama seems to be saying that private health insurance firms should have no problem competing against a Government Option "if it is run just like private insurers". Duh? Private insurers ALREADY compete against 1300 other private insurers that are run "just like private insurers". Having 1300 + 1 competitors that all operate on the same rules will make no difference. Can that possibly be what he means? I think not.

But perhaps the Government option WILL NOT operate by the same rules as the private firms. Perhaps he is not painting the picture correctly when he says the "public option has to be self-sustaining, meaning that taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services, and a good network of doctors, just like private insurers do..." Can you name ANY government program that is self-sustaining, isn't subsidized, provides good service and has to run a profit or even break even like private firms do? Hmmmm......I can't. First of all, by its very existence a Government program is subsidized by the taxpayers! It's a Government program - to even come into existence it has to be using public money to hire (more) government bureaucrats, write regulations, monitor policies, etc, etc. And now for the bonus round: Will the Government health program be required to run a profit to "pay back" its "investors" - ie the taxpayers - like private firms have to do? I don't think so. That means it will continue to be subsidized by the taxpayers while it operates with losses and provides (the usual Government) inefficient service.

So on the one hand, Obama is either saying the Government run health care option will be run "just like all the other private firms", in which case it is no different than the 1300 private firms that already compete against each other, or the Government option will be playing by different, unfair rules - subsidies, no need to be profitable, no need to comply with the same regulations, etc - and the private firms won't be able to compete against it, since it will be unfair competition.

Finally, to try and make his point that private firms will be able to compete with the Government healthcare option he cites the example of the Post Office vs Fed Ex and UPS. As he says "If you think about it, UPS and Fed-Ex are doing just fine. It's the post office that's always having problems …" So the great shining example of Government "competition" is the pathetic Post Office - perpetual losses, taxpayer subsidies, declining market share, long lines, poor service, lost mail, unfriendly service people, and the always present"Next Window Please" signs. We can only wait for and expect the corresponding "Next Doctor Please" sign from the highly efficient Government Health Care Program. When the Post office loses your mail it's not the end of the world, but if the Government Health Care option loses your Grandmother, well, that's a little more serious......

So, the great communicator has completely failed in trying to explain how the Government Health Care option makes sense and either provides competition to the private sector and/or provides a more efficient option than private firms.

On second thought, maybe he DID succeed in explaining what the Government Option is all about.

A is A after all.