Job creation – more jobs or redefining the problem

With 25 million Americans looking for work and the unemployment rate at 9.1 per cent, an article on the ABC news site looks at proposals for job creation including a National Infrastructure Bank and “Buy Domestic” plans.

The first thing to say about job creation is that it may be wise to redefine the problem.  Rather than creating jobs we should be looking at how to ensure everyone has a reasonable and equitable standard of living.When there is some evidence that the resource base is declining, creating more jobs is going to deplete resources even faster and bring forward a major catastrophe.  One way to ensure a standard of living would be some sort of guaranteed annual income scheme.

Whenever I hear the words bank and loans I think money creation.  A National Infrastructure Bank would be another attempt to create more money in the economy.  This is the same as quantitative easing which has already be tried.  Also such a bank owned by the government would end up making loans to further the political interests of those in office.

The other job creation proposals mentioned in this article would work to limit imports.  The law of comparative advantage tells us we would all be better off to specialize and trade.   Even if the economy is declining this law would still be in effect.

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