Well all economists do not agree. I don't, but no one asked me. Here again we have evidence of the bad economic consequences of confusing GDP with our economy. As I've said before
It is not hard for the government to "create jobs." All it needs to do is spend a lot of money to hire them as bureaucrats of give someone else a lot of money with the understanding that they will hire them. As I've noted before, however, this begs two very important questions:
Was the increase in GDP during 2009 and early 2010 really indicative of economic progress? If so, why was it dependent on government subsidies? Perhaps the increase in GDP is merely indicative of an increase in government spending.
- How do we know the jobs are productive or ultimately a waste of scarce factors of production and time?
- What about the jobs lost because of capital consumed as a result of the stimulus?
Expansionist monetary and fiscal policy do not contribute to prosperity, because neither creates the saving and investment in capital accumulation necessary for real economic expansion. Neither do they aid entrepreneurial activity or foster the development of the market division of labor. By thwarting these engines of prosperity, interventionist macroeconomic policy hampers real recovery and at best, provides us with prettier GDP numbers even while a plethora of people remained unemployed.