New data that the jobs created by the stimulus have been overstated by thousands is compelling, but it's really a secondary issue. The primary issue is that the government cannot "create" anything without hurting something else. To "create" jobs, the government must first extract wealth from the economy via taxation, or raise the money by issuing debt. Regardless of whether the burden is borne by present or future taxpayers, the result is the same: job creation and economic growth is inhibited.

At the same time the government is taking undeserved credit for "creating jobs," a new analysis of the Cash for Clunkers program by Edmunds.com shows that most cars bought with taxpayer help would have been purchased anyhow. The same analysis finds the post-Clunker car sales would have been higher in the absence of the program, which proves that the program merely altered the timing of auto purchases.

Once again, the government claims to have "created" economic growth, but the reality is that Cash for Clunkers had no positive long-term effect and actually destroyed wealth in the process.

Right now businesses and entrepreneurs are hesitant to make investments or add new workers because they're worried about what Washington's interventions could mean for their bottom lines. The potential for higher taxes, health care mandates, and costly climate change legislation are all being cited by businesspeople as reasons why further investment or hiring is on hold. Unless this "regime uncertainty" subsides, the U.S. economy could be in for sluggish growth for a long time to come.

Whether the burden to pay for the government’s interventions are borne by current taxpayers or assumed by future generations stuck with the consequent debt, the end result is a relatively lower standard of living. Yesterday, the president stated, "We're going to continue to explore each and every avenue that I can think of that will lead to job creation and economic growth." Here’s an idea: rescind the remaining “stimulus” money and begin the process of downsizing the federal government, which fostered this economic downturn to begin with.

In these days of trillion-dollar deficits it might be tempting to celebrate the mere mention of spending cuts – but therein lies the problem with the President's effort. Taxpayers will not realize any savings from this proposal since the administration already plans on spending over $3.5 trillion this coming fiscal year, along with a deficit in excess of a trillion dollars.

Even if one were to pretend that this gesture lessens the taxpayer's burden, $243 million amounts to a rounding error, given that Uncle Sam spends around $10 billion a day.

Unfortunately, PAYGO would only require offsets for new entitlement spending. Such a system will have no inhibiting effect on existing entitlement spending, which comprises around 60 percent of total government spending and rising.

Given that the current administration and its congressional allies have already gone on record as supporting massive new entitlement spending to be paid for, in part, with higher taxes, there is every reason to believe that PAYGO's "deficit neutral" requirement will result in higher taxes rather than offsetting spending cuts.

Implementation of PAYGO really isn't a deficit control mechanism as much as it is a smoke screen designed to provide the illusion of fiscal propriety while allowing the government to continue swelling. A more serious proposal to rein in out-of-control federal spending and debt would have called for statutory spending caps on discretionary spending and mechanisms to slow all entitlement spending.