Posted by: David Offutt | November 10, 2011

On Governments Creating Jobs and Saving Social Security

On November 8, 2011, Arkansas voters approved a $575 million bond program to repair more than 400 miles of interstate highways. At least 27,000 jobs are expected to be created.

How many times have you heard the standard, conservative cliché that “governments do not create jobs” and have actually given it any thought? Is there really a Social Security crisis, or do you just accept that there is one? The November 8 elections gave us some encouraging signs – Arkansas voters renewed a highway bond bill that will create 27,000 jobs, and Ohio voters rejected Republican Gov. John Kasich’s anti-worker/anti-middle class/anti-public servant bill. Hence, I thought this would be a good time to take a look at the ridiculous claims that creating jobs and saving Social Security will destroy this nation.

El Dorado, AR, opened its $43 million high school in August 2011, accommodating 1500 students.

This August, my home town, El Dorado, AR, opened its new, beautiful, state-of-the-art senior high school. Does anyone really believe that it was built with no electricians, no plumbers, no carpenters, no bricklayers, no designers, no landscapers, et al? Did no one manufacture and install all those tables, chairs, and desks? The city widened Timberlane, the street that leads to the new school from West Hillsboro/Hwy 82B, to accommodate the anticipated student traffic. Was this done without any construction crews?

A former colleague read one of my monthly columns on my High Noon website and left me a note – yes, that same banal platitude: “Governments do not create jobs.” I sign a statement every year acknowledging that if federal funding for my position as a teacher of adult education expires then so will my job. The teacher who left me that note resigned from our program as a regular part-time teacher to teach math at the state sponsored Southern Arkansas University in Magnolia. Her husband works in East Camden for Lockheed-Martin, which is heavily dependent on government contracts. If someone like she really believes that “governments do not create jobs,” you can see how much trouble the country is really in.

Divorced from reality, a strange otherworldliness seems to have taken hold of much of the nation. They seem to believe that the Construction Fairy builds bridges, highways, dams, schools, and other public structures. They expect the Public Service Fairy to hire educators, firemen, policemen, park rangers, and other civic jobs.

Mitt Romney should be a good representative for the plutocracy. David Koch sponsored one of Mitt’s first fundraisers, and Romney considers the Koch brothers to be the “financial engines of the TEA Party.”

Paul Krugman, the Nobel laureate and economist, laments the right-wing’s belief in the Confidence Fairy. It kicked in almost immediately after the near economic meltdown and the election of Barack Obama in 2008. Plutocrats, like the Koch brothers – whom Mitt Romney calls “the financial engines of the TEA Party,” were well aware of what really needed to be done but quickly organized to prevent constructive action. The Confidence Fairy concept is the naïve and counterproductive belief that if government cuts spending and pays off its debts, then businesses and consumers will feel more confident about the future and will begin spending again.

Economist Paul Krugman fears that the current rightwing belief in the Confidence Fairy will lead to disaster. The conservatives in the U.S. and in Europe are promoting austerity measures of spending cuts when they need to be promoting government spending.

The obvious fallacy of believing in the Confidence Fairy is that the unemployed, the underemployed, and what’s left of the income-stagnated middle class don’t have the money to spend. Therefore, businesses are not going to increase production for goods they can’t sell. Also, the upper 1 % who have most of the money, wants to have even more and is obsessed with letting as little of it as possible trickle down to the have-nots.

It seems that the more employees that a corporation lays off, the more likely the CEOs will be rewarded with huge bonuses: The Bank of America recently announced the termination of 3500 jobs and rewarded its CEO Brian Moynihan with a $9 million all-stock bonus. Also, Moynihan and two other top executives saw their annual base salary increased $50,000. So, apparently, the richer the top 1 % gets, the less likely they will create any jobs. Interesting isn’t it.

Now, let’s look at that so-called Social Security crisis. It has been determined that if nothing is done about the current Social Security program over the next 27 years, by the year 2037, it will be able to pay most of the current benefits but not all of them. Some of my more elderly friends laugh this off because they figure to be dead by then. Some people are wealthy enough that they expect to never need the benefits, so they don’t care anyway.

The biggest myth about Social Security is that it is a drain on the national budget. Actually it pays for itself and is borrowed from to make the annual deficit seem smaller that it really is. The phony crisis issue is being used by those who want to destroy the system. The plutocrats don’t want to pay into it and clearly don’t care whether anyone else who truly needs it has access to it or not.

FDR signs the Social Security Act into law in August 1935. Contrary to critics and opponents of the program, it is still doing very well and is not in crisis.

Many people have forgotten one of the most important reasons that FDR and his New Dealers created the Social Security System. It was to encourage older workers to retire and get out of the job market to make room for the younger unemployed workers. Therefore, most of the ideas to reform SS that are being proposed by opponents of the system would do a lot of harm and virtually no good. Most payments are not that large anyway, so cutting benefits would be irresponsible and hurt the consumer economy and the quality of life. Increasing the age for full retirement from 66 to something higher would harm efforts to reduce the 25 million unemployment/ underemployment problem.

Social Security can still play a role in creating jobs, and there are various solutions for financial solvency well beyond 2037. The age of eligibility for full retirement could be lowered back to 65 or even down to 64. Right now, the amount of one’s earnings for contributing to Social Security ends at $106,800. That limit could certainly be raised to assure the funding of such an invaluable program.

The problems with doing anything that might create jobs or improve Social Security are obvious. The Fox-Republican-TEA Party is not going to do anything that might assure the reelection of Barack Obama. Also, too many of those in the upper 1 % incomes and their allies in Congress and in state governments, like Wisconsin and Ohio, become apoplectic at the very idea that those who benefit most from our system should help pay for it. They don’t believe in the concept of “indivisible, with liberty and justice for all.” They definitely like “liberty” but only in a “dog eat dog” context in which they are the rugged individualists who are on top and the rest of us are failures not worthy of their bother.

by David Offutt
A version of this essay was published November 21, 2011, in the El Dorado News-Times as a guest column.



  1. Agree 100%. Well said.

  2. I worked for a multi-national corporation. I was the purchasing manager and as such owned company stock and received reports. At one point each plant was told to reduce costs by 10%. If this was done across the board the CEO would receive a triple digit bonus and each plant manger would also receive a bonus. Our plant was already running lean so that meant jobs. My job was one of those cut. They divided my job among 5 men. I told them at the time that this was not a good idea particularly in purchasing–if everyone is in charge–no one is in charge. They had to reinstate my job a couple of years later.

    • We used to be concerned with the upper 2%, those earning more than $250,000 per year. Now, thanks to the Occupy Wall Stree Movement we are focusing on the CEOs et al. in the upper 1% where most of the wealth and power lies. Thanks for reading.

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