I waited, impatiently, to hear the answers. “You’ll hear the first argument before the bridge is built,” said my neighbor. “It’ll go like this: ‘building this bridge will create 500 construction jobs.’ That’s true, but don’t forget the really important, but less obvious, implication contained in that statement: ‘without the bridge, the jobs would not otherwise come into existence.’ Never mind that the jobs are short term and may last for only a year or so.”
“Well, yeah,” I said. “So, you agree that government spending on the bridge creates jobs. What’s the problem with that?”
“The problem is,” said my neighbor, “you are not seeing the secondary consequences. If you look beyond the immediate, i.e., beyond the people who are directly benefited to those who are, nevertheless, also affected indirectly, you’ll see a very different picture.”
“Wait a minute. This is not making sense to me,” I retorted. “C’mon, the bridge is being built and the workers are being paid. So, what am I not seeing, here?”
“Look, Draco, it is true that one group of bridge workers may receive more employment than otherwise. But, don’t forget this very important fact: every dollar government spends on the bridge will be taken away from the taxpayers, That’s a dollar they would otherwise have spent on the things they needed most. In other words, if the bridge costs a million bucks, the taxpayers lose a million bucks.”
At this point I am feeling exasperated. First, my neighbor disagrees with me, then he agrees with me. Then he wiggles around. So, I said, “And the bottom line is...” I let him finish it for me, “for every public job created by the bridge project, a private job has been destroyed somewhere else.”
“NO! Wait,” I protested. “Let me figure this out. Okay, so there are two job categories, public and private. If the money source is government, the job is public. If the money is not government, the job is private. Hmm. You know, when you first look at it, all you see is the private contractor. But, the bottom line is, a job can’t exist in the private sector and the public sector simultaneously. Neighbor, I’m starting to realize that things aren’t always what they seem to be on the surface. To understand things clearly, I do need to look for secondary considerations, things other than the immediate, local effect.”
My neighbor nodded in agreement, adding, “We can see the men working on the bridge, so the ‘creates jobs’ argument becomes, for most people, convincing. But the jobs we don’t see are also important.”
“Well,” I said, “what jobs do we not see that are important?”
“They are the jobs destroyed by the loss of the million bucks taken from the taxpayers to build the bridge,” responded my neighbor.
“Well, yeah,” I said. “So, you agree that government spending on the bridge creates jobs. What’s the problem with that?”
“The problem is,” said my neighbor, “you are not seeing the secondary consequences. If you look beyond the immediate, i.e., beyond the people who are directly benefited to those who are, nevertheless, also affected indirectly, you’ll see a very different picture.”
“Wait a minute. This is not making sense to me,” I retorted. “C’mon, the bridge is being built and the workers are being paid. So, what am I not seeing, here?”
“Look, Draco, it is true that one group of bridge workers may receive more employment than otherwise. But, don’t forget this very important fact: every dollar government spends on the bridge will be taken away from the taxpayers, That’s a dollar they would otherwise have spent on the things they needed most. In other words, if the bridge costs a million bucks, the taxpayers lose a million bucks.”
At this point I am feeling exasperated. First, my neighbor disagrees with me, then he agrees with me. Then he wiggles around. So, I said, “And the bottom line is...” I let him finish it for me, “for every public job created by the bridge project, a private job has been destroyed somewhere else.”
“NO! Wait,” I protested. “Let me figure this out. Okay, so there are two job categories, public and private. If the money source is government, the job is public. If the money is not government, the job is private. Hmm. You know, when you first look at it, all you see is the private contractor. But, the bottom line is, a job can’t exist in the private sector and the public sector simultaneously. Neighbor, I’m starting to realize that things aren’t always what they seem to be on the surface. To understand things clearly, I do need to look for secondary considerations, things other than the immediate, local effect.”
My neighbor nodded in agreement, adding, “We can see the men working on the bridge, so the ‘creates jobs’ argument becomes, for most people, convincing. But the jobs we don’t see are also important.”
“Well,” I said, “what jobs do we not see that are important?”
“They are the jobs destroyed by the loss of the million bucks taken from the taxpayers to build the bridge,” responded my neighbor.
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