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

Authored by Peter Schiff via SchiffGold.com,

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.

 

Comments

merizobeach beepbop Fri, 05/04/2018 - 22:50 Permalink

A partial solution would be converting all SNAP, welfare, and disability payments to wages for unskilled jobs like picking up trash from dumping sites: if you want government hand-outs, then do something to earn them.  And whomever the crew foreman would be can pick up an equal share too.  I wouldn't even hesitate to go so far as to say that all government bureaucrat jobs come with the stipulation of one day each week of trash / litter collecting.  And if by some impossible miracle all the litter is cleaned up, then make said vagrants and bureaucrats clean up the other waste in shelters, prisons, etc.  Bottom line: if you want to suck on the government teat, then you can wipe its ass, too.

In reply to by beepbop

nmewn MillionDollarButter Sat, 05/05/2018 - 08:00 Permalink

So it could be properly stated that, socialism is an interference with Mother Nature herself!

Hmmm, I wonder how much psychological damage that simple statement will inflict on special snowflakes everywhere...lol...sending them screaming out of their safe places once more...back into the arms of their "progressive" therapists...to reinforce their "natural place" in this world...as being very...special...snowflakes.

Whoop! Times up. See you next week! ;-)

In reply to by MillionDollarButter

silverer nmewn Sat, 05/05/2018 - 09:07 Permalink

If it doesn't work in nature, it won't work for humans. Take the bee hive. Every bee works and produces. The male drones only job is to mate with the queen. Once that chapter in the story is finished, the drones who don't work or contribute anything of further value, are driven out. The US doesn't drive out the non-productive. It subsidizes them. A sure way to eventually lose "the hive".

In reply to by nmewn

gdpetti lookslikecraptome Sat, 05/05/2018 - 11:26 Permalink

Unless they have to pay for them, as another article on ZH today points out, the cryptos are the top means of late payments to freelancers... and since freebies is what our economy is all about, isn't this do nothing, and get paid for it exemplified by the Fed's interest payments to the banks keeping their deposits there? Why work/make loans and take the risks of reality, when youj can just park your capital at the Fed and collect free money? Isn't this also exemplified with the farm programs that pay 'farmers' or corporate farms to let select lands lay fallow? Isn't this what most religions are about? at least those that become state supported? Aren't most research projects following this same example of getting paid to do research on the obvious?

It's all fake.... all the time... or at least 90+% of it... which is why you can't 'fix' the problem... you have to stand back and let the patient die.... it's simply too late... and any that do stay too close for too long will get dragged down in its undertow.... same with the markets, same with all those 'agents' that assist our intel/military ops around the world... same always with empires.

In reply to by lookslikecraptome

847328_3527 CogitoMan Sat, 05/05/2018 - 13:05 Permalink

Obamacare in part was a total failure because the cost of providing total health care was shifted to a small target group of middle class Americans instead of spread across the entire population. Cost shifting to the middle class working people is so socialist an din line with Obama's far left ideology of destroying America.

Meanwhile, insurance companies made record profits.

My neighbor is from a Communist country. He confirms Communism does not work since there is no incentive to work. he says these left wing American politicians should move to Venezuela or Vietnam (or some other Communist nation) for a few years before they spout this nonsense.

In reply to by CogitoMan

Nelbev merizobeach Sat, 05/05/2018 - 00:35 Permalink

It would also help if there was a cap on aggregate benefits which there is not in USA, SNAP, TANF, public housing, section 8, Medicaid, and 100 other programs.  It is possible to make $60,000+ on the dole in cash and in-kind benefits not working.  If they can aggregate benefits on an ironically labeled credit card called an "Independence Card," they can also cap amounts sucked up from different programs combined.  UK did this.  Otherwise, urban ghettos will grow.  Working for dole one day a week could cut numbers, guaranteed government job no.

In reply to by merizobeach

gcjohns1971 moutainmomma Sat, 05/05/2018 - 09:57 Permalink

If an illegal works in the field for $15, he gets $15.

If a legal VISA-holder, or a citizen do the same then FedGov gets $4, StateGov gets $3, LocalGov gets $1, and the worker gets $7.  And the employer has to hire a 'Compliance' contractor to ensure he's following all the rules.  That will cut into his margins by $2 per employee.

So, the "legal" comes out $8 per hour behind the "illegal"...and you say he thinks the work is beneath him. 

And the employer of "legals" comes out $2/hour behind the employer of "illegals", and you say he does better because the illegals do better work.

No.

It is a parable on how economies based on production always beat economies based on rent-seeking.

Q: What does all that gov't actually produce in concrete terms???

A: Burdens

In reply to by moutainmomma

Whoa Dammit Stackers Fri, 05/04/2018 - 22:03 Permalink

If you look at how government social programs skew payments to single mother females combined with the loss of blue collar jobs, you will discover that blue collar men basically have a choice of committing a crime and going to jail or finding a way to get on SS disability. A guaranteed job would most certainly be cheaper than the prison industrial complex costs to house them, and probably on par or cheaper than the costs for SS & Medicaid disabilities.

In reply to by Stackers

Endgame Napoleon Stackers Sat, 05/05/2018 - 03:36 Permalink

The same pretends-to-pay/pretends-to-work plan is followed by voted-best-for-moms corporations that staff with nearly 100% frequently absentee moms.

The moms work few hours for low wages to either supplement spousal income or to stay under the earned-income limits for monthly welfare that covers their major bills, like rent and groceries, and the cut off for refundable EITC child tax credits up to $6,431.

The government can afford to pay citizens and illegal / legal immigrants in single-earner households with US-born kids to have sex, reproduce and work part time, but cannot afford this.

Maybe, elected officials just prefer the concept of paying citizens and noncitizens to have sex and reproduce, even though automation is reducing the number of jobs for current and future workers.

I have an idea: Use Bernie’s plan to build that wall.

Give one option to all of the government workers, paying them $12 bucks per hour, not $15 per hour, since they will be living near the southern border where rent is not quite as high, with all of them learning either construction or the office work that supports it. 

In reply to by Stackers

Reichstag Fire Dept. Stackers Sat, 05/05/2018 - 12:32 Permalink

Au contraire, said the Canadian who has been to Cuba many times!

Cuba does not have 100% unemployment any longer! When I was there in 2011, the Cuban government laid off 200,000 "government" workers (simply stopped paying them for the least effective jobs) and directed their attention to its growing Approved PRIVATE ENTERPRISE List!

That's right, Cuba has slowly begun to shift back to *gasp* Capitalism as a way out of the high cost of government expenditure.

In reply to by Stackers

Lea ClickNLook Sat, 05/05/2018 - 09:33 Permalink

Not only you don't know history or economics, but you don't know definitions either. Sweden has never been a socialist country.

And China, despite having worked with a socialist system only since 1949, is already overtaking the US - despite its over two century history of capitalism.

The unprecedented ignorance of the Americans is astonishing. The only thing left is to throw up your hands in despair.

In reply to by ClickNLook

Endgame Napoleon Thugocracy Sat, 05/05/2018 - 03:54 Permalink

I am sorry, but while Bernie’s single motherhood mantra annoys me, Hillary was a much worse option, with few sincere beliefs, whereas Bernie really believes in his causes.

He is naive. He has never worked in business, seeing how it really is for most businesses in terms of the limitations in money to pay people or to even pay yourself, while still making any profit. He thinks small businesspeople have a choice not to charge market rates in order to serve a progressive cause, while staying in business when competitors charge less. He does not understand the unfairness of the tax burden on businesses.

He did work in the welfare system, but not in the offices where the unfair means-tested welfare is tabulated. The state workers only make a few dollars more per hour more than the clients, and yet, they are required to have degrees. The average citizen or noncitizen recipient walked out of there with more than I made in a week in just free food due to womb productivity in a single-earner household and part-time work.

He worked in the preschool part. Bernie idealizes all of that stuff. He refuses to see the unfairness of “the system,” as clients who smartly work it cynically call it.

But this plan applies to everyone, unlike his other piled-higher-and-deeper socialism-for-some schemes that pay for some students’ college, while others have to repay their loans, etc.

It is not affordable with the national debt, no, but it is not as outlandish as a lot of Dem ideas. At least, Bernie is addressing the underemployment-of-citizens issue. Democrats have abandoned American labor, focusing instead on race, gender and pandering to immigrant groups.

In reply to by Thugocracy

keep the basta… gwar5 Sat, 05/05/2018 - 03:19 Permalink

Bernie is a communist. Take from the individual and share a bit but it has always meant  that [[WE}} easily get to take it all.

AS the {{oligaths}} did in USSR breakdown and UK and  USA grabbled all they could,  85% of it, and then Yeltsin gave it to Putin who stopped the {{olis}}  who hate him still.

I saw a close up of Bernies eyes around last elections, thought he was harmless nice old man as the young  ones were following him then  SAW HIS eyes and he is not nice at all. not at all.

 

In reply to by gwar5

Al Gophilia gwar5 Sat, 05/05/2018 - 06:37 Permalink

Socialism sucks, sure, but what, pray tell, are we wallowing in right now; a protective and sustaining Constitutional Republic? It's the Central Bank, stupid! (Not you, just a play on an old idiotic saying that somehow gained respect). It is a thief's construct which engenders socialist outcomes. We will eventually be dead broke, our children waking in an ocean of debt, as the news that $21.2 trillion and climbing, is not repayable through government tax channels.

Collectively, and practically, we are unable to repay our national debts. We're at Zimbabwe levels of bankruptcy with only myopic trust remaining; we just can't see it, ...... yet. 

http://www.usdebtclock.org/

In reply to by gwar5

Oldwood HRH of Aquitaine 2.0 Fri, 05/04/2018 - 22:31 Permalink

What is fair?

Life is not fair.

Can a progressive government made up of people, defeat nature and create fairness?

I DON'T THINK SO.

What we want, is to not have to work. Given we have not yet "progressed" to the point, then our second choice is to have a job we can NEVER be fired from. Looking at the level of malfeasance and criminality in our government, with NO accountability, can you do better than that?

In reply to by HRH of Aquitaine 2.0

HRH of Aquitaine 2.0 Oldwood Fri, 05/04/2018 - 22:55 Permalink

I didn't mention anything about fairness. Zero.

I simply pointed out, for someone that has never worked in the private sector, that Bernie and wifey are living very well off the US Tax Mule.

My mother and grandparents were very clear on the subject of fairness, as I can't tell you how many times I heard, "life isn't fair," "no one owe's you a living," and "get that chip off your shoulder." I paid attention.

In reply to by Oldwood

GreatUncle Oldwood Sat, 05/05/2018 - 06:51 Permalink

What is wrong is that you are forced to pay through any and all taxation the free ride of some.

Should only be pay for those services you need.

No more legislating you to purchase when you do not need it then everything is based upon its value to the person paying the tax.

Should I not have the authority to demand government pay me? Because this is really what government does to me and you get fuck all in return.

In reply to by Oldwood