More economic illiteracy

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more-economic-illiteracy

In yet another startlingly display of the government’s economic illiteracy, Yvette Cooper has announced plans to dish out £1bn to 'create' jobs for 47,000 unemployed.

She would do well to ask herself one simple question: 'where will the money come from?' Of course, the answer is the taxpayer, either now or in years to come. The billion pounds that Cooper gives away will be taken from the pocket of the consumer and the tills of business. Consumers will spend less, and businesses will take on less staff – creating jobs in the public sector will inevitably destroy jobs in the private sector.

In reality, Cooper must have asked herself this question, and she (or at least her advisers) must know full well that there can be no sustained gain in employment from this scheme. Rather, they have their eyes on a political prize. The fabricated jobs are concentrated and obvious: photos of the newly-employed will find their way into government press releases and election manifestos, while the invisible losers, as many and as serious, will be left ignored.

Then there are the jobs themselves. These are positions that were deemed unnecessary even in the most prosperous (and profligate) years of the last decade, and yet it is now, when the country faces the greatest fiscal crisis of a generation, that the government decides that our money is well spent on dance assistants and tourism ambassadors. In the private sector, workers generate wealth, or they lose their job: in the public sector, there is no such discipline.

Having seen the government splash out more than a trillion pounds of our money to save the bankers, and collectively bearing a public debt of more than two trillion, it is all too easy to dismiss a billion as irrelevant. But we shouldn't - it's enough to pay MPs' expenses for a decade, exempt Dorset from income tax, or send a cheque for forty quid to every household in Britain.  This money should be given back to private individuals and private firms, who alone have the potential to bring about the economic growth that will get us out of this recession, and bring the unemployed back to work.