Is it essential that government keep non-essentials?

There is a government shutdown looming in Minnesota. The big debate is whether cutting non-essential employees will hurt the so-called recovery. The obvious answer is that we will be better for it in the long run.

[amazon_link id=”0517548232″ target=”_blank” container=”” container_class=”” ]Economics in One Lesson:Read about the broken window falacy here[/amazon_link]How will eliminating “non-essential” jobs from government hurt the economy? It is painful, but these people will hopefully re-tool into essential industries. This needs to be done to put our economy on a solid footing.

Let’s pose a hypothetical situation:

The town of Anytown has a large number of shoe shiners. In fact, out of the 3,000 rural residents, 1500 shine shoes. On a given day, about 10% of the shoe shiners get a single sale.

Using today’s political logic, we’d bail them out and hope for better days. If they were government shoe shiners, we would just continue paying them, after all, their union would throw a fit if we let them go.

Most people would clearly identify the problem here. A full 50% of the population is doing work that no one needs or wants. Their continuance in this shoe shine industry cannot be sustained because the market does not demand it.

Let’s move the 1500 Anytown shoe shiners to a more productive industry. They will have to take pink slips, go through some tough times, and re-tool their operations. After all is said and done, they can come back producing something the markets demand. Anytown will be better for it and can prosper once again.

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