Here’s a link to Part One. To really understand the following article, it will help to read Part One, which explains why govt sponsored infrastructure jobs, or any govt jobs for that matter, do great harm to the economy. The gist is because those jobs waste money and time and other scarce resources on projects of little to no importance, when there are more valuable uses for those resources.
Today we will talk about the second argument in favor of taxing the rich and using the money for infrastructure. Just Jokes wrote about such a scheme “And let’s say those newly employed used the income they received to buy food, clothes, shoes and books and also to buy a home where they could rent out a room to receive further income for a rainy day.“
I take that quote to mean that the workers get to make money and live dignified lives, so they benefit. Which is a good reason for the govt to tax the rich and hire workers to improve the infrastructure, since it benefits the workers.
The argument has great emotional appeal. In our last election, the TV ads were full of exactly this argument when some politician was pleading for our votes. Vote for me because I will create jobs, they all said.
But the argument is seriously flawed, as are the TV ads, because it fails to distinguish between productive jobs and parasitic jobs. We have already written about the difference between productive and parasitic jobs many times. [Here's a link. If this is the first time you are seeing the phrase "parasitic job", then you may want to do a search of this blog for that phrase to read more about this important concept.]
The gist is that a parasitic job gives money to the parasite who has the job, and is thus good for him personally, but his getting free money does not benefit the economy at all. On the contrary, it is a great drain on the economy and will lead to the impoverishment of the whole country, eventually including the parasite himself.
This is exactly what happened to the Hostess Twinkie Company. The unions made sure the workers had parasitic jobs, which eventually bankrupted the company. The workers then lost their jobs, which would never have happened if they had productive jobs.
Imagine if those campaign ads showed hungry people with sick children. President Obama then stretches his savior‘s hand out to them, turning them all into vampires. And not the cool vampires of Twilight, but the flesh eaters of The Walking Dead. Now the camera shows them smiling and happy, as they suck the blood of the living.
“I used to be hungry, but now I’m a parasite. My politician gave me a parasitic job, where all I have to do is collect a paycheck, but not do any work at all.”
“My job is even better,” chimes in another happy vampire. “I get paid to do actual harm to the economy, using up valuable resources on infrastructure when they are badly needed elsewhere.” [See Part One of this series of articles].
How do you think ads like that will work?
Giving someone a dignified life is very nice. But not if it takes away someone else’s dignity, which is what a parasitic job does. It robs someone else of his income, and impoverishes the economy as a whole. Not to mention that how dignified is it to be a parasite? Dignity comes from being a useful human being with a productive job, not from being a parasite.