How to Create Jobs Now | Richard W. Rahn | Cato Institute: Commentary

How to Create Jobs Now | Richard W. Rahn | Cato Institute: Commentary: "In essence, they are fixated on the old Keynesian idea that government spending can create jobs. Milton Friedman, F.A. Hayek, and many other Nobel Laureates and other fine economists, such as Harvard's Robert Barro, have demonstrated that the concept is dead wrong and neither works in theory or practice. Yet, because it gave politicians a rationale to spend more of other people's money, it is a bad idea that has never died."

"'in economies open to trade or operating under flexible exchange rates, a fiscal expansion leads to no significant output gains. Further, fiscal stimulus may be counterproductive in highly-indebted countries; in countries with debt levels as low as 60 percent of GDP [gross domestic product], government consumption shocks may have strong negative effects on output.' Note the U.S. has a 68 percent debt-GDP ratio and it is rising."

"increases in government spending are associated with lower levels of employment and vice versa."

"The Crains' report also showed that regulatory costs are about 36 percent greater for small firms (the big job creators) than for large firms ($10,585 per year versus $7,755). Regulation is a hidden tax on both employment and productivity growth. Much regulation does not even come close to meeting reasonable cost-benefit tests."