Peter Schiff Rants Bernie's Guaranteed Jobs Program Is "Utter Nonsense"

Bernie Sanders wants everybody to have a job with health benefits paying $15 per hour. Most people would like to see that happen. But Bernie is willing to put your money where his mouth is. He’s come up with a plan guaranteeing every American worker “who wants or needs one” such a job. Here’s how the Washington Post described the proposal.

 

"Sanders’s jobs guarantee would fund hundreds of projects throughout the United States aimed at addressing priorities such as infrastructure, care giving, the environment, education and other goals. Under the job guarantee, every American would be entitled to a job under one of these projects or receive job training to be able to do so, according to an early draft of the proposal.”

 

According to a representative from Sanders’ office, the senator has not come up with a cost estimate for the proposal or decided how a government this is more than $21 trillion in debt would fund such a program. 

As Peter Schiff put it in his latest podcast, Bernie Sanders has come up with a lot of dumb ideas, but this one is probably the dumbest.

 

"This is ridiculous.  What an asinine idea... The fact that Bernie Sanders, who is a US senator, could propose such utter nonsense. I mean, we have senators who are basically complete ignoramuses when it comes to a basic understanding of economics or the role of government. Bernie Sanders may be a socialist, but the United States of America is not a socialist country. This is a socialist concept – that the government is going to employ everybody.

 

Wrap your head around this. Bernie could have been president.  If the Democratic Party hadn’t been in the tank for Hillary, he might have won the nomination, and he may well have been able to beat Trump.

 

"So, he could have been president. A guy that thinks the government should employ everybody and pay them $15 per how. Think about how ridiculous this is.”

 

Peter outlined a number of obvious problems with this scheme. In the first place, what are all of these people going to do to warrant a $15 per hour wage? A lot of them likely have no skills. Is the government going to train them? Are they going to get paid while they’re being trained? Who is going to assess all these people to determine what kind of job they should be able to do?

 

And Peter pointed out an even more fundamental point – the goal of an economy is not just jobs.

 

"We don’t want jobs just so people work. The goal is the production – that is the product of those jobs.  Jobs is a means to an ends. If the government hires a million people to dig ditches and then another million people to fill the ditches back up again, those are 2 million jobs.  But we’ve got nothing to show for it. We’ve produced zero.  So, those jobs are a drain. We are wasting resources. We’re wasting money. Nothing is being accomplished.”

 

Some will argue the government will put people to work doing valuable tasks and making necessary products.  But how will it know without a profit incentive?  How do we know how to best use resources with no market-based information?  It will end up being nothing more than a bunch of politicians throwing resources at pet projects that may or may not beneficial or even necessary.

 

Here’s another question. What’s the motivation for the “worker?”

 

If you’re working for the government and your job is guaranteed, do you have to show up? They can’t fire you. If they fire you, you’re guaranteed a job … No matter how shitty you do that work, you’re going to get that job. So, can you imagine the quality of the work that would be performed by workers who know that no matter what they do they can’t be fired?”

 

The labor participation rate is at a very low level right now. You’re talking millions of Americans who don’t have jobs.  Let’s say all these people show up for one of these $15 per hour jobs.  How is the government going to pay for this?  It will cost trillions of dollars.  The feds can raise taxes. But if everybody is working a government job, they will be effectively paying themselves.  When the government takes money from its own employees, it’s not getting money that it didn’t already have. The only real tax base is the private sector. And Bernie’s little scheme would wreck the private sector.

 

Consider the impact on private employers. If you’re making $10 an