I have read that according to the CBO each job created under stimulus will cost between $100-300K. These jobs will likely pay no more than $40k a year. Does this make any sense to anyone? Certainly makes those who are scratching their heads wondering if this stimulus is really about jobs or pork spending seem like the rational ones.
If you take the President at his word and accept that the stimulus is about jobs then why not a programs that gives companies a credit for each job created. For example, if you create a job that pays $40K you get a $20K grant from the stimulus. Even if you gave businesses a 66% reimbursement for each job created you would still create many multiples of the jobs than the current $100K price tag per job. You would also leverage private money and leave the business decisions up to corporations.
The additional bonus is that with all these workers back on the rolls (and it wouldn't take years, corporations would go on an immediate hiring binge with these matching funds as their marginal productivity would soar given how cheap each additional worker is boosting profits thus helping balance sheets credit ratings and stock prices) states would not be strapped for unemployment insurance money which would also not have the knock on effect of having them strapped for Medicaid money etc.
Housing would also start to turn around or at least put in a bottom with millions back at work in short order the rug that unemployment is to housing would not be pulled and defaults would decrease and people would be able to afford to stay in their homes. The waterfall effect that foreclosures are having on housing prices would be stemmed and housing could start to recover.
Commercial real estate would not be the next shoe to drop because all these new employees would need some space to work in keeping buildings full.
The cost of all this would end up being substantially less in fiscal etrsm because all these people w0oudl be paying taxes, substantially reducing the net cost of the stimulus. This is important because it is all borrowed money, the less we have to borrow the better off we are and the lower our interest rates will be. The benefit to the nations confidence would be invaluable and people would not feel that they needed to get in to hunker down depression mode which is just adding to the crisis with all sorts of reatil going under.
I was speaking to a friend of mine who runs a couple of small businesses and asked him what would he do if he could get 50-66% matching funds by hiring new employees? He told me that he would hire 20 people within a month, that would be a 25% expansion of his work force!
$100-300K for a $30-40K job eventually or $20-30K for a $40K job in the next month or two. You do the math!
My suggestion would be to have an immediate jobs stimulus as outlined above where each new $40K job would be incentivized by a $26.5K federal grant. 4M jobs would cost $106Billion!
Again, that is $106B for 4 MILLION $40K JOBS! Letâs go crazy and spend $212B and get 8Million jobs, that would put most states back in to surplus not to mention the growth in GDP that would produce.
Then when people have had time to think and debate we can pass a spending bill when we are not all having a âmillions more unemployedâ gun held to our heads, but my guess is that it wouldnât be needed. And our children and grandchildren would thank us, as it is they who will be pay this borrowed money back.
If you take the President at his word and accept that the stimulus is about jobs then why not a programs that gives companies a credit for each job created. For example, if you create a job that pays $40K you get a $20K grant from the stimulus. Even if you gave businesses a 66% reimbursement for each job created you would still create many multiples of the jobs than the current $100K price tag per job. You would also leverage private money and leave the business decisions up to corporations.
The additional bonus is that with all these workers back on the rolls (and it wouldn't take years, corporations would go on an immediate hiring binge with these matching funds as their marginal productivity would soar given how cheap each additional worker is boosting profits thus helping balance sheets credit ratings and stock prices) states would not be strapped for unemployment insurance money which would also not have the knock on effect of having them strapped for Medicaid money etc.
Housing would also start to turn around or at least put in a bottom with millions back at work in short order the rug that unemployment is to housing would not be pulled and defaults would decrease and people would be able to afford to stay in their homes. The waterfall effect that foreclosures are having on housing prices would be stemmed and housing could start to recover.
Commercial real estate would not be the next shoe to drop because all these new employees would need some space to work in keeping buildings full.
The cost of all this would end up being substantially less in fiscal etrsm because all these people w0oudl be paying taxes, substantially reducing the net cost of the stimulus. This is important because it is all borrowed money, the less we have to borrow the better off we are and the lower our interest rates will be. The benefit to the nations confidence would be invaluable and people would not feel that they needed to get in to hunker down depression mode which is just adding to the crisis with all sorts of reatil going under.
I was speaking to a friend of mine who runs a couple of small businesses and asked him what would he do if he could get 50-66% matching funds by hiring new employees? He told me that he would hire 20 people within a month, that would be a 25% expansion of his work force!
$100-300K for a $30-40K job eventually or $20-30K for a $40K job in the next month or two. You do the math!
My suggestion would be to have an immediate jobs stimulus as outlined above where each new $40K job would be incentivized by a $26.5K federal grant. 4M jobs would cost $106Billion!
Again, that is $106B for 4 MILLION $40K JOBS! Letâs go crazy and spend $212B and get 8Million jobs, that would put most states back in to surplus not to mention the growth in GDP that would produce.
Then when people have had time to think and debate we can pass a spending bill when we are not all having a âmillions more unemployedâ gun held to our heads, but my guess is that it wouldnât be needed. And our children and grandchildren would thank us, as it is they who will be pay this borrowed money back.
