Barak Obama intends, as President of the United States, to institute a fiscal program that would increase the number of jobs in America by three million, with eighty percent of those jobs in the private sector. Therefore, six hundred thousand of those jobs would be government jobs, filled by employees who are paid from the tax dollars of Americans in the private sector. This plan will, if successful, will help to alleviate the pressures from the mass firings and layoffs of Q3 and Q4 2008. With the unemployment rate of 7.2% being the highest seen in the US in sixteen years, (http://finance.yahoo.com/news/Economy-loses-524000-jobs-in-rb-14013641.html) addressing the causes of unemployment is a matter of national concern.
The average salary for a government worker is $56,000. (http://www.simplyhired.com/a/salary/search/q-Government). Comparatively, the average American worker’s salary is just over $42,000. (http://www.worldsalaries.org/employment-income.shtml). Obama intends to increase the government payroll by $33.6 billion annually. The President’s budget for 2009 provides $14.3 billion in Title I funding for low-income schools. (http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/overview.pdf, page 3). This figure does not include the cost of benefits for government employees. The Bureau of Labor Statistics puts the number of civilian government employees at over 1.8 million. An increase of 600,000 employees is an increase of 33%.
Increasing the number of employed Americans is a good thing. However, this remedy may be worse than the disease. Governments can’t spend their countries out of recessions. When governments attempt to spend their way out of economic downturns, they turn recessions into depressions. Assuming a perfect return of 2.4 million American jobs from Obama’s plan, the plan would return the number of employed Americans to their pre-2008 levels. Of course, now the American people would be also paying $33.6 billion in salary to 600,000 more government employees, and additional billions in the form of government employee benefits.
Instead, Obama should embrace his tax-cut plan. While Congressional Democrats were briefly divided on the plan, history has demonstrated that increased capital in the private sector directly leads to increased employment in the private sector. In a capitalist society, centralized planning leads to inefficiencies in the ability of the market to react to consumer forces. To maximize the economic benefit the American government can have on the American economy, Obama should pursue legislation that plays to the capitalist country’s strengths, rather than mandating weaknesses.