Every Economist, Mr. President? No, sir!

The President seems to believe that he can say whatever he wants and no one will hold him accountable. He now claims that "every economist, from both sides of the aisle, believes that the stimulus program created jobs." http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Obama-says-every-economist-back-claim-stimulus-saved-or-created-two-million-jobs-83550017.html

I am an economist, Mr. President, and I know, based either on simple first principles of economics, or on a more rigorous controlled study of labor markets in each major sector of the economy, that the unemployment rate would have been much lower today had the stimulus program never occurred.  

You are either woefully unaware of the facts, Mr. President, or are purposefully distorting the facts. Neither is good.  When are you going to realize that just because you say something does not make it so. The world does not contort itself to support your version of the truth.

Do not put words in my mouth, sir.

Comments

[FR]

Dr. Jarrell,

I have recently picked up reading your blog and thoroughly enjoy it; thank you for taking the time to produce this!

Could you please shed some light on why you believe, without any stimulus, the nation's unemployment rate would be much lower today?

Regards,

Faithful reader

[Sherry Jarrell]

Thank you! Sure, I'm happy to answer your question. I've touched on it in earlier posts about government spending. In my view, because government spending is funded with taxes that would have been invested by private industry in value-creating activities, we lose economic value with every dollar the government spends. I think people forget that it is business profits that generates every dollar of taxes collected by the state, local and federal governments and that, if not for the taxation, those businesses would do more of whatever they did in the first place to create the profits that enabled those taxes. This includes buying more capital and hiring more labor. Some taxation is necessary, of course, to pay for public goods, like defense, but even then we are trading off economic wealth. I hope that answers your question!

Sherry