Spreading Pigou Around

I think when you spread the wealth around, it’s good for everybody.”

That’s how society should behave in America, according to the economic wisdom of Barack Obama, who has failed to match words with behavior.

Under the Obama administration, public sector employment has increased by more than 2%, while unemployment rose 26% for American workers now threatened with further job cuts through Obama’s stimulus.  Adding insult to injury, American taxpayers pay to provide a better environment for government workers, who enjoy over 35% higher salaries and 70% more benefits.

But according to the late economist Arthur Cecil Pigou, whose work best explains financial crises, climate change, and other critical issues of today, bad government policy influenced by public sector unions – leading to wage rates that are too high – is the reason why unemployment in the United States is also high, in spite of Obama’s massive spending.

Recommending that the United States Congress think like Pigou can solve the problem of unemployment inequality, through a fiscal policy of cutback budgeting that would result in 35% more jobs for Americans, with government unions agreeing to match wages in order to spread the wealth around.


A.C. Pigou, “Wage Policy and Unemployment,” The Economic Journal, September, 1927.

John A. Garraty, Unemployment in History: Economic Thought and Public Policy (New York: Harper & Row, 1978).

James D. Savage and Herman M Schwartz, “Cutback Budgeting,” in Handbook of Government Budgeting, ed. Roy T. Meyers (San Francisco: Jossey-Bass, 1999).


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