Thomas Sowell Quotes
Since the government creates no wealth, it can only transfer the wealth required to hire people. Even if the government creates a million jobs, that is not a net increase in jobs, when the money that pays for those jobs is taken from the private sector, which loses that much ability to create private jobs.
Sowell, Thomas. Dismantling America. Basic Books, 2010, p. 33.
The debate in America around jobs during the Great Recession in 2012 may have seemed like a new issue for many Americans. The government wanted to economize, but there was a very high unemployment. Should the government spend money to employ more people or cut back on government jobs. The same issue faced the British in 1848. Most of the politicians and the Parliament wanted to reduce government spending. The Prince (husband of Queen Victoria) and the Queen observed that the economy solution would fall more heavily on the working class. At this time, the British monarchy was far more liberal than most of the politicians.
It is actually true that public works do create indirect jobs, however the efficiency of indirect job creation is not very good. If the government spends $100 on a public works project half might go to construction materials and the rest pays the salary of construction workers. Part of the materials purchase pay the salaries of workers in the supply chain. And most of the salary gets spent on goods and services which helps to pay other workers and thus jobs are created when there is a public works construction project. However the reason FDR did not want this fact to be publicized is because the economic relationships to indirect jobs is counterintuitive. Many people hearing that public works construction also produces jobs say “Well then let us fund many more government public works programs and create even more jobs—keep spending on projects until there is no more unemployment.” However that is not a sustainable strategy. There is enough benefit in the direct jobs and the use of the public improvement, that it was, in FDR’s view, sufficient without “selling” the indirect job creation picture.
Thomas Sowell is an American economist, social theorist, and senior fellow at Stanford University's Hoover Institution.