5.8 Won't Government Spending Programs Create Jobs?

The Biden administration says that it's spending programs on the environment and on infrastructure and on everything else will create high paying jobs.  Can a government simply create jobs by spending lots of money?  What if the government doesn't have the money?  Can it just print the money, spend it and create lots of high paying jobs?  Can the government just tax people more and use that money to create lots of high paying jobs?

In the video below Professor Steven Horwitz argues that creating jobs is easy. 

 

China did create jobs by having people dig a canal with shovels instead of bulldozers.  Milton Friedman pointed out they could have created more jobs by having them more people dig with spoons instead of shovels.  There is a problem though.  Where is the money going to come from to pay for all those jobs?  Lets say it would take 10 people with bulldozers to do the job.  If you pay each of them a $100 a day that's a thousand dollars a day in salaries.  What if instead you have 1000 people do the job with shovels.  You still only have a thousand dollars to pay them with.  That means each person will only get a dollar a day.  So it's easy to create jobs, but how are you going to create high paying jobs.  What if you print money.   Then you can create high paying jobs.  The problem with that is that when the government prints money  it loses value.  You can't buy as much with the money when the government prints it.

   It's true you need fewer people with bulldozers but once you build that canal there will be jobs for people to move foods along the canal  It will become cheaper to transport the food.  The cost of food includes the cost of transporting it.  If the transportation cost is less the food will cost less.  People will have more money to buy other things and the companies that make those things will hire more people.   That's how you get more high paying jobs with money that is worth a lot.

If the government hires a company that specializes in bulldozing canals the canal will probably be built more efficiently and for less money than if the government rents bulldozers and hires people to drive them.  That is because companies have experience and they make more money the more efficiently that accomplish something.

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Why is China's economy so good?  Isn't it a socialist communist country?

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