Once again, the big government policies of President Obama and the Democrats in Congress have kicked the American worker while he's down. Today's release of December non-farm payrolls revealed that another 85,000 Americans lost their jobs. With the official unemployment rate at 10% and the unofficial rate (which includes discouraged and underemployed workers) topping 17%, the job prospects for the newly unemployed continues to be bleak.
More significantly, we continue to replace manufacturing jobs with less productive service-sector jobs. Not only does this lower the wages of working Americans, but it forces the trade deficit higher -- further undermining our economy, lowering the value of our dollar and diminishing our standard of living.
Real job growth will not return until government removes the obstacles that prevent small businesses from expanding. Washington must end its assault on capital formation, entrepreneurship and profits. With more regulations and higher taxes, government effectively places a heavy tax on job creation, which is why so many are now unemployed. The oldest axiom of economics is:if you want less of something, tax it.
Furthermore, government must stop spending. By borrowing so much of our scarce savings, it is crowding the private sector out of the credit markets. More importantly, all the money being printed to finance government "stimulus" spending ensures that even those who manage to keep their jobs will find it harder to make ends meet as inflation erodes the purchasing power of their wages.
We must resist the calls for government jobs programs. Such programs simply replace the more productive jobs that might otherwise have been created by the private sector with make-work tasks like paving unnecessary highways or, worse, "community organizing." This makes the economy less efficient in serving the demands of consumers, driving prices higher and placing even more jobs in jeopardy.
Peter Schiff is president and chief global strategist of Euro Pacific Capital, a full-service NASD-registered broker-dealer that specializes in foreign securities. He is a recognized expert in the foreign securities markets as well as the currency and gold markets. He is also the author of two bestselling books:
Crash Proof: How to Profit from the Coming Economic Collapse
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