Thursday, August 4, 2011

Goverment Can Stimulate the Economy

I heard once again that government doesn't create any jobs. This is absolutely false. When the government has a road built the company that they contract with creates jobs. People who work directly for the government spend their money in stores and restaurants. Those businesses then hire people to meet demand. If the roads were private there is a good chance that those jobs will still be there. If we get rid of public employees there is a good chance that the ancillary jobs would go away. So, government spending does create both direct and indirect jobs.

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