Monker wrote:Gin and Tonic Sky wrote:Monker wrote:slucero wrote:The government doesn't create jobs....
So, if the government signs a billion dollar contract with General Dynamics or Lockhead, or whoever, no jobs are going to be created.
And, if those contracts are cut, no jobs are lost.
You are simply wrong.
Interesting that someone who rightfully points out that wars of the past ten years has been a drain on the economy suddenly supports the military industrial complex as job maker?!
There is a difference between the cost of a war and the yearly budgeted cost of building ships, planes, bayonets, and horses.
And, one of the arguments I made back then to how horrible a President W really is was war can be an economic stimulus on its own. But, the way we fought the Iraq war was silly. There was no call to Americans to produce and sacrifice for the good of the country. It was fought as invisibly as possible so no one could see the sacrifices...nobody except the national guard was asked to step up.Sure, when the government signs a contract with General Dynamics jobs are created, and if we have sequestration next year (likely) jobs will be lost. But you need to understand that when the government spends money that money gets transferred out of the private sector- one less dollar spend by the government isn't used to invest produce , or create in the private sector. Do you think these business owners will just go away and become small vegetable farmers if there will be no govt contracts. No, they will innovate and create in the private sector.
These are needs the government has that must be filled in some way. An aircraft carrier has to be built so the government contracts somebody to build it. That means thousands of jobs and billions of dollars going back into the economy. If all government contracts to General Dynamics stop, I would expect thousands of people to go out of work, and executives to retire early as millionaires or go into politics...much like Mitt Romney did.Of course you are going to say to me "So What one job is one job . And that govt spending has a multiplier effect that private spending wont?
No, I am going to say that the private sector has no business ordering aircraft carriers or stealth bombers or drones or anything like that to be built. These are companies that are largely dependent on government contracts and if those contracts disappear, so do the jobs. It is not something the private sector can pick up - because there is no need for the private sector to have what the government is asking them to produce.Government contracting with its sealed bids and lowest cost bid evaluation, and the lack of effective oversight in contract execution encourages inefficiency along the line and what is called rent seeking (where a supplier/person hired of the contract takes the contract and money and doesn't work to add value).
Not my argument...the fact of the matter is there is ALWAYS going to be government contracting for various reasons. You can argue the process is flawed...what you can not argue is the contracts don't have to be there, or that they don't create jobs. Well, I spose you could try, but it won't work.In the Short term- govt contracts create jobs, and short term cutting govt contracts cost jobs, yes.
General Dynamics has been around for over 50yrs. Doesn't seem very 'short term' to me.But mid to long term you have an poorly balanced economy, with more inefficiency and higher overall unemployment.
The fact that General Dynamics has been such a huge success over the past couple decades contradicts what you say above.
I'm not making the argument that government contracts should be used as a tool to manager the economy....However, dropping or adding a large number of contracts DOES impact the economy. Therefore, you are wrong, as you admitted in the quote above - government CAN create jobs.
Actually all it means is that General Dynamics is a private company that has a 13 Billion dollar taxpayer paid monopoly...
as I said originally - "Shovel ready" jobs, created with stimulus money fixing roads and bridges, simply to count people as "employed", government funded at an average cost of $200K per, is not an efficient use of taxpayer money... The government taking an actual requirement to bid, then placing an award with the winning supplier for an actual good (like an aircraft carrier) or service is another thing entirely, and not germane to the conversation.
If private citizens could own, fighter jets, M1 tanks, or Apache Helo's... I'm pretty confident that supplier competition would bring down the cost drastically.. but we'll never know as the govt. forbids private ownership of such things.. for good reasons too.. but the unintended consequence of that is a single customer and limited supplier base that results in a lack of real competition, and a somewhat disrupted pricing mechanism... it's how we get $500 hammers.
As far as war being stimulative to an economy... logical fallacy. It certainly wasn't stimulative in WWII, because when the war ended we promptly went into recession for 3 years. After outfitting 18 Million service men and women, and nearly every available factory and resource had been converted to making war goods, all WWII did was suck all productive activity out of the economy and destroy its ability to survive when the current customer no longer needed the war goods it produced.
Our current armed forces are miniscule compared to WWII, and even less stimulative to the economy... The amount of money being spent though, while still massive, is really just an implied massive federal income tax, under the premise of maintaining any level of defense preparedness. In reality it is essentially massive middle-class shadow welfare.
