You hear democrats pushing for more public sector jobs "to improve the economy". They bewail the sequester and belt tightening at the state and local level that has laid off cops, teachers, and firemen, and they claim that hiring more public sector employees will reduce unemployment and make the economy grow again.
Trouble is, public sector jobs are a drag on the economy, they take money away from workers and businesses. This money does not produce any wealth. Take too much and the businesses have to raise prices, and the workers demand more money, which again raises prices.
Back in Keynes day, it didn't matter. Today, when prices go up, people buy from overseas sources (China) 'cause its cheaper. Go to WalMarts, everything on the shelves is made in China. Back in Keynes' time there were no overseas sources.
Today, countries that burden their businesses and workers with too many taxes find industry leaves their country for lower tax (also lower wage) overseas.
Can you say "Shoot yourself in the foot"?
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