Graphical Proof: Government Spending Doesn’t Create Jobs

• February 8, 2010

A year ago 2009 Brian Wesbury published this graph in The American Spectator indicating a strong correlation between increased government spending and increased unemployment:

That graphic has since been updated for another year’s wroth of unemployment numbers, and the results are striking:

The point? Government spending can’t create jobs across the economy. It can inflate government payrolls, sure, and perhaps create some jobs with specific government contractors. But across the economy, government spending doesn’t create jobs.
Which means that there is no justification for the deficit spending spree our politicians are currently on. The excuses we hear from Obama and his apologists like “deficit hawk” Senator Kent Conrad is that the spending is necessary to stimulate the economy.
That’s not true. The spending isn’t helping. It’s hurting.

Tags: Asshats, North Dakota News, Politics

http://Array bob1956

Bush screwed up no doubt he tried to appease instead of lead folks like you. By the way if that is true what you are saying wouldn’t the graphs show something different? President Obama led the verbage on cuttting down all business saying stuff like making it hard for coal companies to operate, cap and trade health care initiatives ignoring cost to the private sector. If you were a business and were threatened with higher costs and taxes while the grinning president said we just want to redistribute a little. Would you invest in the near future, would you hire?
robert108

All govt spending does is to create political power for the spenders, at taxpayer expense. They are bribing us with our own money.
Pitt

“Do tax cuts produce jobs? Then how come bush’s tax cuts didn’t produce sh*t?”

Answer: Because spending went up.
WKW

Don’t argue with idiots, it brings you down to their level and they have a lot more experience.
http://proof-proofpositive.blogspot.com/ proof_positive

Yet another sock puppet, Arbuckle? One for each of the voices in your head???
sayanything-4625

Well Mr. Know it all, why didn’t the stimulus keep unemployment at 8% like O promised?
sayanything-203

The truth is the Bush tax rate cuts actually did create private sector jobs. Particularly the reduction in tax rates on capital and investment.

But the Bush tax policies are relevant only to the extent that they point up the abject FAILURE of what Obama and the Democrats have done over the past year. Rather than creating jobs and reducing unemployment as Team Obama said their “stimulus” would, they have managed no new private sector jobs in spite of the obscene levels of federal spending, and the unemploymnet rate has continued to go up… not down as they predicted.

Team Obama predicted a three-quarters of one percent drop in unemployment for every one percent increase in GDP. But the economy continues to lose jobs, not gain new ones. It’s the Obama policies that aren’t working. Businesses aren’t hiring, and throwing more money we don’t have at the problem isn’t solving it. Obama is a failure.
Freedom

Well, it’s plain to see DINO has been drinking the plantation kool-aid. Once Liberals develop the collective, socialist, slave-mindset all attempts to apply reality and reason go out the window. No, this has nothing to do with skin color. Poverty is a mental (culture) disease, just like socialism. DINO is a prime example of what is wrong in this country. Please, Liberals leave so we can restore this country back to prosperity and freedom for contributing members of society. I hear France is accepting…
sayanything-203

As an economics prognoosticator, Dino would make a swell lunch lady. WOOF could stack the dirty trays.

Obama himself may not have personally promised an unemployment rate of 7.5% if his so-called “stimulus” package was passed. Or a 8.4% rate if it wasn’t. But White House economists Christine Romer and Jared Bernstein most certainly did. And they did so under the authority of the President’s Council of Economic Advisors. They also stated that for every 1% increase in GDP there would be a corresponding “conservatively estimated” three quarters percent drop in unemployment.

Funny thing about actually being the president… the responosibility for everything that happens, and everythiing that is said, is on his shoulders… personally.

Jared Bernestin is a personable but officious a$$ who talks too much, and there’s no reason to think that Ms. Romer could get across the street without a pair of road guards to guide her. But they are leading economic policy lights of the administration… the Obama adminiistration. And what they say is on Obama. Period.
MrC

Then how come bush’s tax cuts didn’t produce sh*t?

Actually, there was a boom in business and productivity. What brought it all to a screeching halt was the cumulative government (Frank & Dodd) pressure on the financial systems to make home loans to people who could not afford them. Research the Community Reinvestment Act. They forced banks to do this and then they demonized them when logical consequences followed.
Sparks Ar-barks

Good question.
Scott

The graph is visually compelling but a closer look reveals a ‘duh’ moment.
Ok, so Unemployment (UE) and Governement Spending as a % of GDP (GS/GDP) rise and fall together. But since government spending continues to rise, the fluctuation in GS/GDP is caused primarily by fluctuations in GDP. Conclusion: UE rises as GDP falls. You might even get 4 out of 5 economists to agree on that.
sayanything-45648

i agree. The spending isnâ€™t helping. Itâ€™s hurting.
sayanything-203

While we are correcting the willful misstatements of those on the Left, from the time the Bush tax rate cuts were signed nto law in 2003 through 2006, just before the recession started (according to the Left and NBER) the private sector economy created roughly five and a half million new jobs.

Republicans did not think it necessary to count the make-believe “jobs saved” to make themselves look good.

Its also worth noting that those who assert that the Bush administration created no jobs are counting somewhat dishonestly. That is, they start with Mr. Bush’s first day in office, including the Clinton dot.com recession and then the 9-11 catastrophe, right through the “credit crisis” and Obama’s inauguration. What they fail to comprehend, however, is that the same metric will be applied to Obama. Without the “jobs saved” bullsh*t.

To reach his personally promised, often repeated three and a half million jobs created figure, Obama is going to have to oversee the creation of roughly twice that number just to get back to zero. Spending money we don’t have and can’t afford, and raising taxes to make us think he is fiscally responsible obviously isn’t going to cut it.
sayanything-42

Now watch as all the productive entrepreneurs take their businesses and themselves out of Oregon after their massive tax hike…
sayanything-203

Dino,

There is nothing in that WSJ article you have cited, tediously, before that conflicts with what I have written about the Bush administration record on tax rate cuts and job creation.

Despite your obvious enthusiasm for acting like you know what you’re talking about where economic policy is concerned, its been obvious for some time that your knowledge is every bit as diminished as your abysmal comprehension skills. If you need for the rest of us to use smaller words and simpler sentences to help you keep up withthe conversation, just say so.

If you insist that Mr. Bush be held to account for the jobs lost at the very beginning of his term in office, as well as at the end, and that the millions of private sector jobs created due to his tax rate cuts, particularly the rates on capital should be lost in the shuffle, that’s okay… really. Just remember that your boy, Obama, is going to be held too the very same standard. And by that measure he’s already some 5 million jobs behind Mr. Bush.

Its been nearly a year since Obama’s so-called “stimulus” package was passed and signed into law. A year during which unemployment continued to rise, and the unemployment rate is some 40% higher than what the Obama administration said it would be.

Massive Keynesian deficit spending is not a prescription for job growth and economic recovery. Never has been. And it certainly hasn’t been one this time either.
sayanything-342

Obama is just attempting to buy votes with our stimulus money. Any attempt to create jobs is primarily focused on federal, state and union employees and not the general population. The layoffs continue to rise as Barry spins his tall tale.
sayanything-15427

Why was unemployment in the very very low single digits during the Bush admin even though he had the Clinton recession AND 9/11 to deal with? He may not have a huge job CREATION record, but less people were out of work than at most times since we started recording it.
sayanything-42

WKW,

You just libeled idiots everywhere.
DMoney

We were below 5% unemployement after a recession. Wow!
sayanything-551

The new EPA fines are also taxes that you will be paying directly and in the cost of products and services that you buy.

The government cannot create jobs. Jobs are created when the population has money and spends it on goods and services creating demand which in turn creates a need for more employees. When the government takes the population’s money and spends it on a stimulus, as many or more jobs are eliminated in the private sector as are added to the government rolls when the money is spent in areas where there is no demand and on things that the public doesn’t want. In order to keep these government financed jobs going, you have to turn them into permanent entitlement programs that will worsen the problem. The only way to create jobs is to allow the population to have more money to spend on the things that it wants and needs.
sayanything-4808

If that’s true, then how come the Bush years were great up until the Dems took control of congress? How come everything went downhill AFTER they took control?

Oh that’s right, you still believe the economy during the middle of the Bush years when Republicans held sway was worse than now. Which only means that you prefer people to be out of work and the nation miserable.

Pick one, you lose either way. Thank you for playing. Enjoy this half bottle of Turtle Wax. Be careful, Dino used the other half and no one knows but we’re all pretty sure where that was.
Seattle_Mac

Wall Street Journal……..considering the source. I think you just dug yourself into another lib foxhole. Its baffles me that NAZI propaganda, is still alive and kicking in 2010. If its not too much trouble DINO, could I have half of your pay-check? Since we are in such a progressive mood.
sayanything-7406

“Please, Liberals leave so we can restore this country back to prosperity and freedom for contributing members of society. I hear France is accepting…”

Yeah. Or South Africa, I’m sure the ANC would love them.
sayanything-4416

He never promised that. It’s impossible.

bush promised a surplus by 2012, too.

I really hope Alabama continues to sink. Shelby’s desperate acts prove they’re hurting down there and need more welfare.
franko3

DINO:

With regard to the Bush Tax Cuts, the correlation chart says nothing of taxes, only spending. Bush DID NOT cut spending, quite the contrary, he grew spending like noone else… until Obama came along. The Bush Tax Cuts did boost GDP, but barely touched unemployment. In the end, he was just another ruling class hack. As are the majority of politicians in Washington. I say warm up the tar, get the feathers and sharpen the rails and lets humiliate the political class!
sayanything-7406

“The Bush/Cheney economic team broke the windows,
the banks , the stock market , the housing market,
the military.”

Even assuming that was true Obama is now razing the buildings the broken windows were in. If it was wrong for Bush/Cheney to spend money like that, then it is also wrong for Obama to do the same thing. You Liberals seem to have a hard time understanding that.

Besides, didn’t Obama claim to be “different”?
sayanything-7406

“It won’t stop the decline and eventual dissolution of this cesspool you people insist on calling a country.”

Just as a matter of interest DINO, why do you hate this country so much? What has it ever done to you? Name any other country which would even tolerate a person like you?
sayanything-7406

Of course government spending doesn’t create jobs, it’s the fallacy of the broken window.
Seattle_Mac

“Need more Welfare?” Could somebody tell me when and where National Social Reform has ever worked? One lib told me there was a Oil platform in the Atlantic with 12 people on it, and it worked for them:) I just about pissed my pants laughing!
sayanything-1317

And, of course, I’ve discredited these lies over and over. F&F do indeed originate loans, as they take prospective buyers and find them banks…and then either provide the money for the banks to loan or buy the loan right up afterwards.

And the CRA demands that banks show that they make “enough” loans to minorities or be subject to penalties.

And, of course, I’ve explained WHY counting the final number of jobs is deceptive, and it was reiterated above.

But you’ll keep ignoring this,
sayanything-2804

Hi Dino, the economy must be looking up if you were finally able to make bail. Good on you.
sayanything-6955

In the left’s bizarre world, they are not spending enough.
sayanything-4416

Go argue with the Wall Street Journal.

Bush On Jobs: The Worst Track Record On Record

President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. Thatâ€™s almost 22 months of recession during his 96 months in office.

His job-creation record wonâ€™t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clintonâ€™s administration and only slightly better than President George H.W. Bush did in his four years in office.

As for the stimulus: Go ask republican Texas legislators is they found the stimulus useful when they used $12 billion to close 96% of their deficit. Or Nebraska who plugged 88% of their deficit with stimulus money.

30% of the stimulus was tax cuts, just like republicans wanted.

After the massive failure of conservatism last year, it takes chutzpah to say that anyone else’s ideas are wrong.

sayanything-4416

Fellas,

1. F&F’s loan standards were far higher than the lenders who were in bed with Wall Street.

2. Blaming spending for the failure of the tax cuts to produce jobs is a fallacious argument. Spending had nothing to do with the lack of job creation. In fact, more government spending should have only enhanced job creation.

Bottom line: The result of the bush years has been disaster. Blame F&F, blame Carter, blame the CRA, hell, blame FDR! It won’t stop the decline and eventual dissolution of this cesspool you people insist on calling a country.

The United States of Sh*t won’t even exist in 50 years.

Good riddance.

franko3

Are you stupid or do just ignore the facts when they contradict your ideolgy? The chart highlighted SPENDING and jobs, not TAXES and jobs. If you call that doublespeak, then you may want to see a therapist and get a diagnosis, ’cause bro, you got a problem…

sayanything-7695

They set the guidelines for the loans. Once the standards were lowered then all hell broke loose. All brought about by government intervention. Mostly on the part of Libtards.

Despite your doublespeak, the bush tax cuts produced NOTHING in the way of jobs. NOTHING.

There is no magical third way.

Do tax cuts produce jobs?

Then how come bush’s tax cuts didn’t produce sh*t?

It was a small tax hike and will be duplicated all over the country. The places that don’t will sink like Colorado Springs.

How come bush’s tax cuts didn’t result in any jobs? How come low tax states like SC have the highest unemployment?

How come Alabama’s cretinous Senator is blackmailing us for more government welfare billions?

It’s great fun watching this country try and work a way around reality. Seeing it collapse is a total treat.

We’ve been through this a hundred times. The CRA doesn’t mandate loans. Fannie & Freddie don’t originate loans.

The Wall Street firms, the ones that went under, own the mortgage mess.

Another clue Einstein: democrats weren’t in power from 1994 to 2007.

sayanything-7406

“As an economics prognoosticator, Dino would make a swell lunch lady. WOOF could stack the dirty trays.”

But then Dino would be making a positive contribution to this country (for once). Somehow I doubt he would like that.

sayanything-50

The Bush/Cheney economic team broke the windows,
the banks , the stock market , the housing market,
the military.

Whose calling for their return that doesn’t have a noose
and a scaffold?

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Graphical Proof: Government Spending Doesn’t Create Jobs