3 Fallacies in Obama’s Public-Sector Stimulus Strategy

0 Posted by - June 19, 2012 - Career & Business, Economics, Elections, Money

13400577891284 300x200 3 Fallacies in Obamas Public Sector Stimulus StrategyPaying people to do busy work won’t revive the U.S. economy.

Poor President Obama. Life under the White House klieg lights must seem soooo unfair. Senate Majority Leader Harry Reid has been saying since last year that although “private-sector jobs have been doing just fine,” public-sector jobs need help with another $35 billion in stimulus spending, without raising an eyebrow. But the president regurgitates the same line and all hell breaks loose: The blogosphere chortles mercilessly; Twitter chatter roundly lampoons him; and Mitt “I Like Being Able to Fire People” Romney accuses him of being out of touch with ordinary Americans.

Truth is, though, that Obama was asking for it. His statement might be conventional wisdom in his party’s circles. But it nonetheless manages to pack in virtually every “progressive” economic fallacy—and then some.

For starters, his claim that private-sector job growth is hunky-dory is hooey. It is true that private companies have added 4.3 million jobs since February 2010. However, this represents a 2.8 percent rate of job growth compared to the 8 percent average after previous recoveries—despite (or perhaps because of) $800 billion in stimulus spending.

CONTINUED at Reason. Written by Shikha Dalmia.

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