Job Growth in May: economic recovery or another bubble driven by Government spending?

Posted on June 4, 2010 by


The May jobs report tells us that government created 10 times more jobs than the private sector, the engine of growth for our economy. Most of this government job creation is financed by government spending! With unprecedented deficits and government debt all around the world, the so called economic recovery seems to be entirely financed by government debt. Is this “economic recovery” just another bubble that’s going to burst sooner or later?

Prominent economist Marc Faber said the following:

The next bubble is already here. This time it’s government spending and fiscal deficits that will double the government’s debt during the next six years or less…The U.S. government is largely deranged, the private sector is the dynamic one, and that’s why I object tremendously against building up fiscal deficits because (they) shift economic activity into unproductive government instead of leaving it in the private sector.

Here’s a video of a CNBC discussion about the May Jobs Report. Although most analysts understand how fragile the US economy is at the moment, they do not seem to want to discuss the gravity of the situation and the negative impact of Government spending and huge debt levels on private sector job creation for sustainable economic growth.