Streams

Opinion: Without Government, the Private Sector Would Shrivel

Monday, June 11, 2012 - 04:01 PM

The fundamental questions the 2012 election will address are the size of government and the place of government programs in a nation that has always prided itself in being a country of entrepreneurs and private business.

There is undoubtedly a huge amount of waste and fraud in government programs, and I’m one of the biggest fans of rooting it out and actually throwing the crooks in jail (instead of the usual cost of doing fraudulent business - fines).

The latest statistics show the U.S. economy growing at a slow but steady rate with private sector job creation increasing monthly. But “public jobs” are declining at the federal, state, and local level, a phenomenon that accounts for a significant percentage of the disappointing jobs numbers.

As I was driving north in New Hampshire recently I was astonished at the massive road construction on Route 93. They are widening the road, adding new overhead bridges, blasting a lot of rock (NH is the Granite State, after all), and landscaping the heck out of that road. It got me thinking.

This highway project in New Hampshire, as well as in other states create a lot of jobs for the private contractors and sub contractors who have been working on these projects for at least three years now. As I drove on up to Concord I realized that all of these workers and their families had good jobs because of federal stimulus money as well as state and federal highway funds. They don’t appear in statistics as “government” employees.

These hard working men and women probably are opposed to “big government.” And, in November they in all likelihood will vote for politicians who promise to slash big government spending all the while unaware that they are voting against their own jobs.

There are huge chunks of the American economy that would also shrink and die off without public spending. Think Defense spending. No private corporation or private equity fund would finance national security, because there is no market for it.

No fighter bombers, armored vehicles, body armor, military and intelligence satellites, new helmets, 21st century field hospitals in combat zones, new fleets of ships for the Navy and Coast Guard would exist. Bought and paid for by the government, but technically “private sector jobs” on the books because these products are contracted out to private sector firms whose employees are not “government workers.” These jobs wouldn’t exist without Congressional appropriations.

One of my best friends works for a large pharmaceutical company that has two products prescribed primarily to the elderly. When I had coffee with him recently we talked about Medicare and Medicaid. He pointed out that without these programs (paid for by “big government” taxpayer money) his company would not have even invested in the research and testing of these products because the market for out-of-pocket purchases would be way too small. Multiply this by all the medical supply companies. Think Hoveround medical power scooters. Think about GE medical imaging and all of the jobs created by just these two government initiated health programs. 

Would we have technology to launch satellites into space without NASA and the US military? Even as we now privatize space ALL of the R & D that makes this possible was government funded.

And, would you be reading this on the Internet on some sort of electronic device without ARPANET the government financed secure military research network program of the Defense Advanced Research Projects Agency (DARPA) that made the Internet possible?

And, we know that much of the housing and other construction in the United States would not be possible without government guarantee programs that make banks even think about giving mortgages to most Americans. Ditto for people’s trust in banks, Savings and Loans, and Credit Unions which would be virtually nil if the federal government did not insure and guarantee the security of your money in these institutions.

Look at Greece and Spain where the government does not guarantee CD’s and deposits and there is virtually a run on banks. For that matter look at the US BEFORE these government programs were put in place – think run on banks like we saw during the Great Depression.

So let's clean up and tighten up government spending for sure. It is a disgrace how much waste and fraud there is. It’s also clear that in many instances unions have been corrupt and abusive and have lost the trust of many Americans. But let’s also be truthful about how important pubic programs and funding are to significant private sectors industries and services in the United States. It’s a public private partnership that had made us such a prosperous country. Let’s be careful and thoughtful about how much we we slash and damage one side of that vital partnership.

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Comments [5]

Darrell from Harpers Ferry, WV

We need a President who understands and supports the business community and who has policies that will encourage them to create more jobs. What we have is a President who has established policies that make it more difficult for businesses to thrive and that encourage more dependency on government. If we continue down that path, the end result is economic ruin. We need smaller, more efficient government that encourages personal accountability and hard work rather than dependency and sloth. Obama simply doesn't seem to understand how America became the political and economic powerhouse that it is. Continuation of his policies will destroy this country and the rest of the world along with it.

Jul. 24 2012 10:02 AM
sundar

government is just supposed provide a suitable arena for business to compete globally if they do it effectively i dont think a private sector needs help from government. we are talking about a country which fought its way out when other countries where still struggling to find them selves a place in the world map. i think the country's loss of manufacturing jobs is the biggest contributor for private sector looking forward to government since most private sector in this country is service oriented and not manufacturing/export oriented. this paradigm shift happened when immigrant policy changed during clinton era, globalization and tough labor market.
if we relax the immigrant policy and labor market i think jobs will flow back which would fuel more local jobs and cheaper government.

Jun. 13 2012 04:35 AM
JAY from atlanta, ga.

The Goverment is not our daddy..Goverment jobs are union jobs and big time rich union leaders..There are not private small consricution work with enough money to get a contract..We believe in Private companies with employes..Not even more than that they charge the people millions on union dues that the goverment gives to them..I had rather work for walmart so I would have an employee and not the goverment or union works..We need a new president..we need jobs..Insanity: doing the same thing over and over again and expecting different results. Albert Einstein This is what the goverment is doing they tell us the same old stroy using different people but the end are the same..BIG GOVERMENT...

Jun. 12 2012 12:43 PM
listener

Five trillion spent in the last three years makes a mockery of this straw man argument.
We didn't construct roads and provide for R&D before Obama and Pelosi's massive spending and
isn't defense spending explicitly called for in the US Constitution?

"So lets clean up and tighten up government spending for sure" and then lecture those who have the courage to actually do it about how important it is to construct a road "for at least three years now".

Jun. 12 2012 09:28 AM
Skeptick from Arizona

Schmidt hit the nail on the head. why are Democrats so reluctant to point out the same thing. As we slash we cut our own wrists. Much of our "greatness" is a result of great private companies AND great government!

Jun. 12 2012 06:45 AM

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