There is a common myth that if you give people money and give them something to do, they will spend it and that grows the economy. Wealth is only made, and an economy only grows when a valuable good or service is created out of nothing. Prosperity leads to jobs, not the other way around. If you go around smashing everyone's windows, you will create a boom in the window repair business. But you have not grown the economy. You have actually shrunk it in 3 ways. 1. You have destroyed the labor and materials that went into the original windows. 2. You have cost people money to fix the windows. 3. You have diverted human labor and raw materials, both limited resources, from doing something useful.
Bureaucracy is the window-smashing business of government. (See Lesson 4). Forms and rules make work and jobs, but wealth is destroyed, not created. Take taxes, for example. In 2005, Americans paid $265 billion in fees to accountants, just to pay their federal income taxes. * There are an estimated 1.2 million accountants in the U.S. ** Adding IRS employees brings the total to 1.4 million. That's 1.4 million educated, intelligent, hard-working Americans whose skills, talents and labor are wasted, and that's just in the tax business. There's the health care industry, where government has been increasing its role for decades. As a result, a whole new industry of accounting, called Billing and Coding, is emerging to navigate that bureaucracy. Agencies like OSHA and the EPA, which were formed to protect people, have ballooned into intimidating, self-serving Frankenstein's. They add to the cost of doing business, and therefore add to your cost of living as much as any tax. (See Lesson 2).
Two common, related myths circle around President Franklin Roosevelt and the Great Depression. The Democrats often say that FDR pulled us out of the Depression with his massive spending, government hiring, and regulatory policies. Republicans often say that World War II pulled us out of the Depression because it put Americans back to work. Both of these are wrong because they violate the lesson: Jobs don't make money. FDR's jobs created neither goods nor services. His government expansion strangled the economy and dragged the depression on for nine long years. War literally destroys wealth with gunpowder. The only way that war can lead to prosperity in one nation is by conquest, robbery and slavery of another. The Great Depression ended because World War II distracted FDR and the federal government away from trying to "fix" the economy.