Government Can and Does Create Real Jobs

It's an article of faith among Tea Party conservatives that it was excessive government spending what caused the current economic recession, arguably the worst in American history (a depression, really). Only the private sector, they claim, can grow the economy, create jobs, and put America back on the road to prosperity. So by their lights it’s a no-brainer that by cutting government spending across the board and lowering corporate taxes, the wealth now in the hands of idle, stifling government bureaucrats, would devolve to free-market entrepreneurs endowed with the drive and know-how to compound the wealth, leverage profitable businesses and provide stable, well-remunerated employment for millions of American workers.
But if the solution were that simple, Why wasn’t it implemented years ago when the recession loomed? Because lawmakers are ignorant, in denial, fearful of taking politically unpopular measures, corrupt, closet-Communists? No, the reason was simply that the wiser among them knew that as the nation’s biggest consumers, Federal, state and local governments can and do contribute much to economic growth, and, by contrast, that not everything touched by the private sector automatically turns to gold.
Consider, for instance, how in Northern Virginia the fact that a sizeable portion of its residents are well-remunerated Federal employees has enabled them to contribute hugely to local industries, by buying new homes (average price $500K), patronizing restaurants and stores, and, thereby, spawing thousands of jobs. Then there’s the billion-plus-dollar project to upgrade the 495 Beltway and surrounding roadways, another major source of business expansion and employment. All this prosperity, to be sure, is being financed mainly by taxpayer money from other states. Yet, however unfair this transfer of wealth may seem, there’s no denying that for every tax-payer dollar invested in Northern Virginia, the economic returns there are many-fold, and because the increase in total taxes generated by the investment flows back into the national treasury, Northern Virginia is paying back what they got from out-of-state taxpayers, and then some, much as a successful business pay back its creditors with interest. Do the math. If government spending is working in Virginia, there’s no reason it can’t work just as well in other parts of the country.
This is not to suggest, of course, that all government spending is productive. Tea Partiers are right in pointing that much of it is parasitical and wasteful. But the same can be said of the entrenched ruses of the private sector. There is no guarantee, for instance, that the national wealth diverted to Wall Street by cutting government spending and corporate taxes will be not be squandered in foreign ventures, predatory acquisitions, job-killing mergers, lobbying fees, and proliferation of toxic assets. Just as the landscape of government spending abounds with museums that no one visits and bridges to nowhere, the back alleys of Wall Street are littered with trash left behind by Enron, Bear Stearns, Merrill Lynch, Lehman Brothers and others of their ilk— toxic trash left for taxpayers to clean up.
In the 2010 Congressional elections, Tea Party newcomers handily defeated their incumbent opponents by convincing voters that big, out-of-control government was wholly responsible for today’s intractable recession and high unemployment. But now that they are in power Tea Partiers would do well to acknowledge that the housing bubble that triggered the disaster was largely the work of out-of-control gamblers masquerading as free-market financiers. If the newly elected Tea Party members of Congress continue, for ideological reasons, to gloss over or, as some tend to do, turn a blind eye to the private sector side of problem, come next election they might be the ones getting voted out of office.