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 hour working for a private company, wouldn’t you just quit and go grab a $15 per hour government job?
"If you’re a private employer, you’re going to have to pay your workers at least $15 per hour, probably more. If you’re working for a private company, you’ve still got to show up on time and you might get fired. So why not just work for the government where you can show up whenever you want. So, in order for a private employer to get somebody not to take a cushy $15 per hour, no-show government job, maybe they’ll have to pay $20 per hour to get somebody to actually have to do work.”
Of course, private companies can’t just print money to make payroll like the government. They’ll have to raise prices or just go out of business. They will also outsource and automate, which will mean even more people needing a guaranteed government job.
The end result of all of this would be a totally government-run economy.
"I think if this law were to get passed, pretty soon they would drive out all private employees. I think everybody would want to work for the government.
There would be no one left working in the private sector. So, there’d be nobody to tax. So, that means all of these $15 per hour jobs with benefits would be worthless because you’d have nothing to buy with your wages because there would be no real productivity in the economy. We would have a complete socialist society or a communist government. Everybody would be working for the government. The government would have to decide what everybody does. They would be in charge of allocating all of the resources. You do this. You produce that. I mean it would be a complete command economy and it’ll be a complete disaster.”
(Source: Click Here)
While Mr. Schiff skillfully calls out the "asinine ideas" of the common adverse beliefs we share together, his presentations are fraught with other concerns that still require remedy and resolution for potential loss in foresight.
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