Vermont Senator Bernie Sanders has proposed a massive government program to address unemployment, which he states is at 10.5 percent (in fact, it is more than double that at 23.1 percent).
Teaming up with Michigan Democrat Rep. John Conyers, Sanders introduced the Employ Young Americans Now Act at the H.O.P.E. Project in Washington.
If enacted, the legislation will provide $5.5 billion in financing to hire a million young people in both summer jobs and year-round work while at the same time offer job training and skills to hundreds of thousands of people in the same age bracket, according to AlterNet.
The proposed bill will undoubtedly draw more Democrats to the Sanders camp as the unabashed socialist prepares to challenge deep insider Hillary Clinton for the Democrat presidential nomination. However, if passed the legislation will destroy jobs, not create them.
A sprawling multi-billion dollar jobs program will require additional taxes extracted from the private sector and will ultimately result in unemployment.
“Even though the programs may ‘create’ jobs for some workers, the resources to pay for the programs must be extracted from the private sector,” writes Thomas J. DiLorenzo. “Taxing the private sector reduces its ability to create jobs, so, at best, government jobs programs can only alter the composition of employment, not the total volume. More government jobs are created, but at the expense of fewer private-sector jobs.”
DiLorenzo and others note that massive employment programs initiated by FDR during the Great Depression did nothing to stem unemployment and, in fact, increased it. The unemployment rate was higher in 1939 despite millions of Americans enrolled in “public works” government jobs by the Roosevelt administration than it was in 1931 as the Federal Reserve engineered depression unfolded.
The economy and employment did not rebound until after the Second World War when the government instituted sharp reductions in spending and taxes. Economic policies of the time created the Golden Age of Capitalism that lasted from 1945 until the early 1970s.
Economic reality is perpetually lost on liberals and Democrats. “One wonders why facts and history matter so little to leftists. The answer is that socialism is not so much a valid economic system as it is simple criminality,” writes David Deming.
Josh Guckert writes that “while Sanders’s ambitions may be benevolent, his methods are questionable at best. The creation of new federal job programs will do nothing but take capital out of the ‘productive’ area of the economy (by taxing the private sector) in order to fund the ‘un-productive’ area of the economy (the public sector). This is even without accounting for the additional dollars unnecessarily lost in the bureaucracy in between these two areas; alternatively, if the free market were to engage in a similar transaction, it would be a simple fee-for-service trade.”