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Three. The public sector doesn’t just indirectly crowd out private job growth but directly clobbers it as well. That, in fact, is why the regulatory state—the main public-sector enterprise—exists. You can argue that its key products (red tape and mandates) are necessary for public safety, but you can’t argue that they lead to job growth. As the regulatory state grows, the private economy shrinks—and that’s exactly what’s been happening on President Obama’s watch.
Investor’s Business Daily writer John Merline points out that since the post-2008 stimulus, the combined budget of America’s regulatory agencies has grown a healthy 16 percent, topping $54 billion. The overall economy? A paltry 5 percent. Employment at federal regulatory agencies has climbed 13 percent since Obama took office. By contrast, employment shrank by 5.6 percent in the private sector.
Can anyone seriously argue that handing more stimulus funds to more regulatory agencies—something that would inevitably happen given that money is fungible—to hire more bureaucrats to write more regulations will mean more net job growth?
That President Obama can’t see this and naively preaches the stimulus gospel speaks volumes about the liberal bubble that he inhabits. A little ridicule—even by Mitt Romney—is just what he needs.
Shikha Dalmia is a Reason Foundation senior analyst and a
columnist at The Daily, where this column