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Firstly lets split this question into the following two for better analysis:

1. Can government crate wealth?

2. Can government create jobs?

Answer to first question:

Well before we can even start answering this question we must first solve the following conundrum:

What creates wealth? From where does wealth come from?

Luckily for us economic science solved this conundrum already. - The wealth comes from the more efficient use (or in other words from better utilization, or in yet another more economic jargon better allocation) of scarce resources.

This and only this creates wealth.

Thus in order to find out if government can create wealth we cannot just look if government employees can combine the factors of production in order to create something what has some value.

Just building some building or providing some service is not an act of wealth creation itself.

In order to consider output of particular combination of production factors as an addition to the wealth of our society we must first consider the following:

Does the value of this product or service outweighs the cost of production?

But this is little tricky. We do not measure costs in money in economics. The true cost of anything is always paid in opportunities or in another words the cost of anything is always measured in its opportunity cost.

In short opportunity cost can be illustrated by following example:

If you can choose only one from two investments which are in every aspect equal except for their yield such as:

Investment A yield in dollars 1000

Involvement B yield in dollars 999

If you choose B you will be in economic loss of 1 dollar.

Your benefit is 999 dollars but your opportunity cost is 1000. You are in economic loss.

If you choose A your benefit is 1000 and your opportunity cost is 999 so you have an 1 dollar economic profit or in other words you created a 1 dollar worth of wealth.

Insofar, in order for government to create a wealth, its representatives must not just manage to create something new or something profitable or valuable but to create something which outweigh all opportunity costs associated with it.

It is not sufficient to show that police, welfare and so on have value. Of course all of this has some value. But is value of those services an other things provided by government higher than their opportunity costs?

Economic science again already given us answer. Here is a long story short:

In all areas where there are no market failures or I should better say failures to have a market the answer is clear no. In this case government cannot allocate scarce resources more efficiently than private sector.

In a few areas where market failures such as negative or positive externalities or excessive market power are present on could argue IN THEORY that government can produce wealth, PROVIDED that it can solve these market failures more efficiently as a private sector itself can.

Thus yes there is theoretical possibility that for example:

Under assumptions that education yields positive externality (which we can really only assume) subsidizing education could lead to more efficient allocation of scarce resources provided that the opportunity cost of this subsidy (dead-weight loss from taxation and transfers which enabled this subsidy etc etc, list of all opportunity cost could go on and on) is lower than the benefit from this positive externality (which so far we cannot measure, it can be only estimated at best, if there even is a positive externality) government can create a wealth, provided that this positive externality could not be subsidized more efficiently from private sources.

So yes in theory government in some rare cases might be able to actually create a wealth but we cannot measure it so far and until we will be able to measure it we can only hypothesize on whether government can create wealth.

In all those cases in which government cannot allocate, or I should better say help people to allocate, our scarce resources more efficiently, it actually destroys wealth.

Thus just this Econ 101 concepts shows that things are much more complicated as people who are not trained economic professionals often think (BTW. It is sad that Econ is not aught in schools as much as literature or history etc.).

Now to the second question:

Can government create jobs?

Answer is simple. Yes it can.

Even digging holes in middle of the dessert and then filling them again is a job.

Even jumping on one leg can be a job.

So yes government can create jobs.

But question should be rather if government can crate a jobs which are efficient. Jobs which are not efficient are only a dead-weight for the country's economy and those actually destroy wealth should not even be created. The whole society is actually better off without such inefficient jobs.

In order to answer question whether government can create jobs which are efficient read the question one again. The answer is exactly same.

There is a hypothetical possibility that government can crate efficient job in some rare case that there are market failures or rather failures to have a functioning market in some labor markets present, but there is no way to measure it.

So to sum it up can government create wealth and jobs? The answer is that there is no way to measure it. In theory it could, but the real life shows that governments rather destroy wealth and create only inefficient jobs.

However, we can for sure tell that private sector can and is creating wealth and efficient jobs.

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