Bob Thomas: Here's why the last stimulus failed

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"In general, the art of government consists in taking as much money as possible from one class of citizens to give to the other." - Voltaire

When it comes to the economy, society has two classes of citizens: private sector taxpayers and public sector tax-takers. Taxpayers receive zero income from tax dollars, while tax-takers earn all of their income from tax dollars, returning a small portion in the form of personal taxes.

It should be obvious, then, that the tax-taker segment of our society creates no salable or taxable products. By that I mean products created by jobs that are self-sustaining, because production of tangible, salable products is ongoing. Taxpayers create tax dollars. Tax-takers consume tax dollars. Like it or not, that's the way it is - bigger government, more tax dollars.

OK, now let's examine the folly of President Barack Obama's stimulus spending spree. Most of that stimulus money went to grow or sustain governments - federal, state and local. While giving state and local governments some money for infrastructure or like projects - money that typically ends up in the hands of private sector contractors - those jobs were, and are, temporary. They are not self-sustaining like producing tools or soap or paint. And more often than not, governments at all levels used Obama's stimulus money to keep existing employees on the payroll.

Like all socialists, Obama mistakenly believes that growing larger governments creates jobs, and it does, but those jobs are tax-taking jobs. What we need are taxpaying, sustainable private sector jobs. Except for defense spending, through private contractors, governments do little to help the economy. Sure, public employees spend their own discretionary income in the private sector but never enough to offset their salaries, benefits, tools, equipment and office space.

On another front, stimulus money was squandered big time on Wall Street, banks, and two auto manufacturers that should have gone bankrupt like everybody else guilty of dishonest or lousy management. Stimulus money was their payoff for campaign contributions, and to save the faces of two congressmen charged with overseeing Fannie Mae and Freddie Mac. But this was chump-change compared with stimulus money squandered on state governments, which used it to maintain existing programs that would have otherwise been axed.

Now, how can we possibly expect Obama - whose background is that of being a community organizer (ward heeler) and a part-time academic with zero private sector work experience, and who packed his White House advisory staff with identical types of whom only 8 percent have had any private sector work experience - to understand what it takes to create new products or build and sustain businesses while coping with ever-changing, obstructionist OSHA and EPA regulations? He can't! He never will. His publicized intelligence is a crafted illusion.

As an aside, none of what I have written here questions individual qualifications or work ethics of tax-taking, public sector employees. Having been a Nevada legislator, I was associated with state employees at all levels. Some are close acquaintances who are as well qualified, where the jobs are comparable, as anyone I've ever worked with in the private sector.

Now, what should our three levels of government do at the first sign of a recession? Outside of suspending or elimination most of the stifling, make-work regulations that plague creativity and productivity, they should stay the hell out of the way and let the taxpayers go to work. The private sector needs long term stability - stable laws and predictable policies - before it can afford to take the risks of investment and expansion. Federal, state and local government agency tax-takers, with zero private sector workplace experience, arbitrarily make and enforce most regulations. And the hundreds of lawyer-congresspersons in the U. S. House and Senate are no better when it comes to lobbyist-sponsored regulatory laws. The deck is stacked against the private sector - and that sector is our only hope of ending this recession.

• Bob Thomas was the founder and CEO of a high-tech division of Emerson Process, a Fortune 500 company. Later he served on the Carson City School Board and the Nevada State Welfare Board and as a state assemblyman. He also founded and served on the Carson City Airport Authority and recently authored the book "Creating A World Class Company" (Amazon).


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