Democrats see job creators as villains

Richard McCord, Henderson

Tuesday, Aug. 17, 2010 | 2:06 a.m.

Despite spending hundreds of billions of borrowed dollars, Democrats have failed to stimulate job creation. Why?

Investment, not spending, creates jobs. The source of the dollars Democrats have borrowed and spent is the private sector. That has reduced the capital available to businesses to invest. Spending keeps the economy going, but investment creates new capacity to produce, leading to job creation.

And investment takes place only when businesspeople see enough profit potential to induce them to take risk. Higher employee health care costs and uncertainty about taxes and regulations have raised business risk and lowered profit potential, so businesspeople are less willing to invest, and fewer jobs are being created.

Democrats’ good intentions are entangling them in a self-defeating policy mix. With their victims-and-villains view of the world, they want policies aimed at helping the victims and punishing the villains. The problem is that the villains of their world are the job creators.

The solution lies in recognizing government’s role in the economy. Government is an expense, not a source of economic growth. It can only take more or less from the job-creating private sector. When the economy falters, government must take less. It must shrink itself: tax less, spend less.

The Democrats are doing the opposite, and the results are not surprising.