The New Millionaire Jobs

The Los Angeles controller this week released a report showing that out of the $111 million of stimulus money only 55 jobs were created. This is a little over $2 million per job created. What this demonstrates is how little of a multiplier government spending is. Keynesian economics are concerned about aggregate demand to create jobs. One problem I have with this is the way they create jobs. For instance, if we wanted to build a road and create the most jobs we could have people building the road using outdated technology. Instead of using modern equipment to get dirt out of the ground workers could use spoons. This would easily decrease unemployment but it would be clear that productivity would be very low. Keynesians feel that if the private sector can't create jobs we should just throw money at the problem and try to create jobs. However, what they don't realize are all the jobs lost because we took $111 million from taxpayers and are subsidizing public works projects. Could you imagine what entrepreneurs or even consumers could do with $111 million? Although, $111 million seems like a lot of money it is just a drop in the bucket when we compare it to the $800 million in total stimulus. My point is that I suspect that there will be more stories like this, with few jobs created and government trying to throw good money after bad. This one quote sums it up perfectly

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."- F.A. Hayek