But the government has no money of its own, and the money that it takes from the private economy to increase its own hiring or to promote hiring in some favored industry reduces the money available to hire people elsewhere in the economy.
I'm so tired of hearing this line of gussied-up crap. Like most market fundamentalist/libertarian notions, it sounds good but falls apart unless you restrict the argument to an artificial set of assumptions which don't match up very well to reality. And the fact that a lot of credentialed people push it doesn't make it any more true.
(Nothing personal here, by the way. To be fair, I fell for this stuff too in my younger days. For instance, at one time I entertained the idea that government employees don't really pay any taxes, since "the government has no money of its own.")
The map is not the territory. Money is not wealth.
Money is only a marker, a stand-in for real wealth in goods and services. It is essentially created out of thin air, either directly by the government or under governmental authority (Federal Reserve). In a well run economy, the money supply will have at least a loose relation to changes in actual wealth due to changes in productivity and population, but you shouldn't get in the habit of thinking the two things are equivalent.
Like private industry, government has overhead, but services and goods provided through the labor of government employees are wealth that is just as real as anything produced by the other parts of an economy. Roads. Medical research. Public health services. Satellite data. Weather forecasts. Geological and oceanographic surveys. National Parks. Public education. I could go on all night, but you get the idea, yes?
Overhead and wastage aside,
the money that goes to government employees represents real wealth that is produced by those employees. And contrary to free-market mythology, the so-called private economy is not necessarily more efficent or less wasteful than government, even without considering the social costs of cheap labor. For instance, compare the 2-3% cost of running a single-payer system like Medicare with the average 15% (as high as 50%!) of private health insurance.
Forgive my little outburst, but I'm just sick of the same tired, smug right-wing rhetoric. Like smarmy jokes about Post Office efficiency. In my opinion the Post Office still does a pretty damn good job, but before the Nixon gang tried to privatize it in the 70's, the U.S. Postal Service was considered one of the crown jewels of the nation. Ever see the 1947 movie "Miracle on 34th Street"? The whole climax of the plot rested on the Post Office's reputation for reliability. The plot device worked because it was based on real public opinion.
- end of rant -