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Thursday, February 4, 2010

Government Projects ≠ Created/Saved Jobs

Please, our politicians, please realize that government public works projects do not create or save jobs.
  • First, most companies that do public works projects aren't in trouble anyway.
This is simply because the government is already their main source of work, and the government hasn't cut back in those projects when the rest of the economy cut back.
  • Second, these projects don't add jobs, or at least not in any notable numbers.
These projects just keep the current employees a little busier. The companies can't just hire people from other "construction" industries (which are in trouble) without completely retraining them - a framing carpenter doesn't know how to lay asphalt, and a residential housing engineer doesn't have expertise in bridge design.
  • Third -- and as the President has paid lip-service to -- most jobs are created by small businesses.
Government projects primarily go to large businesses. In fact, President Barack Obama has tried to put in legislation that requires most work of large projects go to unionized companies.

Why? The President has said -- over and over -- that he never makes a move without consulting the unions. He also -- and illegally, I might add -- gave the majority ownership of GM to the unions, rather than to the collateralized loan holders, those who were given -- in writing -- ownership of the company or property, in exchange for the risk of the loan. You know, like your home loan? How would your bank like it if you filed for bankruptcy and the court gave your divorced ex-wife title to your house free and clear, and only gave the bank 2 cents on the dollar? That's not only unfair to them, it's illegal. But President Obama did just that, or more specifically, he directed his appointee "car czar" to do that. Sorry -- off-topic rant.

If the government bought lots of goods from small businesses - pens, desks, computers, stuff like that, the business would get a boost from that, and might hire some people, at least temporarily.

If the government would reduce taxes on owners of small businesses, you know, the demonized "wealthy" who make $250k or more, since all sole proprietorship and partnership business revenue goes on the owners' personal tax returns, they might be able to hire more people.

If the government would declare that no new fees, taxes, or regulations of any sort would be placed on small businesses, they might have enough confidence to hire some people.

Oh, and concerning capital gains taxes: Small businesses don't have "capital," stocks or bonds, to have any capital gains taxes. All "gains" show up as regular income for the owner. Besides, capital gains taxes have been 0% for years. But those rates are expiring, and some people (like President Barack Obama) think they can get some political steam by essentially just not raising them back to where they were, for a small group that wouldn't be affected by it anyway.