Fed needs to spend just 60 bln$ to reduce unemployment to 7%

[kashirin]

1% employment is around 1.5 mln people
to employ with 40k salary per year it's just 1.5 mln *40k= 60 bln$ per year
it would cost even less probably as most of those people would stop using various forms of welfare

why not to organize massive infrastructure project and employ those people?

They could hit their employment target overnight
instead of that they want to print trillions, inflate various bubbles and put finance system into danger

I really don't understand

 

[logic_man]

Quote from kashirin:

1% employment is around 1.5 mln people
to employ with 40k salary per year it's just 1.5 mln *40k= 60 bln$ per year
it would cost even less probably as most of those people would stop using various forms of welfare

why not to organize massive infrastructure project and employ those people?

They could hit their employment target overnight
instead of that they want to print trillions, inflate various bubbles and put finance system into danger

I really don't understand

Well, you are missing a lot of costs of employing someone, for starters. If you employ someone with a $40K salary, chances are the other costs associated with employing them are close to another $40K, so you need to almost double your number right from the start.

Second, it's laughable that anyone thinks a "massive infrastructure project" has a snowball's chance in hell of getting past the environmentalist lobby. They aren't going to let anything bigger than a log cabin get built without a 30 year court battle.

The entire topic of "infrastructure" should just be dropped because that's the reality, as opposed to the fantasy.

That's one reason why it is always better, in the current day and age, to give tax cuts. At least that way, the spending doesn't need to be approved by every whackjob in the political class with an agenda. Let people keep more of their own money and they can spend it on stuff that's already on the market, rather than waiting for the spending to happen in a couple of decades when the last lawsuit gets adjudicated.

 

[peilthetraveler]

You could also make the infrastructure project something that produces income to reduce the costs of paying the employees. For instance...put them to work mining for gold. All they have to do is get 3 grams of gold per day to pay for their labor (2 oz per month).

And just to get people working hard, there should be a 50/50 profit split for crews (after expenses paid) for instance, if it costs 50 oz per month to run your crew of 8 or 10 people and you find 100 oz that month, you do 100 oz - 50-oz divided by 2 = 25 oz bonus for the crew. So that month everyone gets $4k to $5k bonus (at todays gold prices of $1670).

And lets not forget all the new towns that would pop up and create more jobs because the miners need services in these places were there is nothing around for 30 miles.

 

[logic_man]

Quote from peilthetraveler:

You could also make the infrastructure project something that produces income to reduce the costs of paying the employees. For instance...put them to work mining for gold. All they have to do is get 3 grams of gold per day to pay for their labor (2 oz per month).

And just to get people working hard, there should be a 50/50 profit split for crews (after expenses paid) for instance, if it costs 50 oz per month to run your crew of 8 or 10 people and you find 100 oz that month, you do 100 oz - 50-oz divided by 2 = 25 oz bonus for the crew. So that month everyone gets $4k to $5k bonus (at todays gold prices of $1670).

And lets not forget all the new towns that would pop up and create more jobs because the miners need services in these places were there is nothing around for 30 miles.

This would be fought in court by environmentalists also.

They won't even let something useful like an oil pipeline be built, do you think they are going to allow a bunch of gold mines to be opened up?

The US legal culture is simply too litigious for anything relating to large-scale construction to happen in anything less than a decade, whether that construction would produce income or not.

 

[kashirin]

Quote from logic_man:

This would be fought in court by environmentalists also.

They won't even let something useful like an oil pipeline be built, do you think they are going to allow a bunch of gold mines to be opened up?

The US legal culture is simply too litigious for anything relating to large-scale construction to happen in anything less than a decade, whether that construction would produce income or not.

what about sweeping streets?
or sorting garbage?
it's possible and even environmentalists will be satisfied

the aim it to get jobs, right? and reduce unemployment rate
it can be done significantly easier than printing trillions of dollars and in the same time giving money to people for doing something helpful

 

[morganist]

It might create jobs but for how long?

If people don't do a sustainable job that has its own demand they will not be able to maintain it in the future. If there is no natural demand for what they are doing as soon as the subsidies end the jobs go. It is almost the same as subsidies. It would be better to support failing industries that could be a success in the future rather than just giving people a job.

 

[logic_man]

Quote from kashirin:

what about sweeping streets?
or sorting garbage?
it's possible and even environmentalists will be satisfied

the aim it to get jobs, right? and reduce unemployment rate
it can be done significantly easier than printing trillions of dollars and in the same time giving money to people for doing something helpful

All that type of work is going more to machines than people. to the extent it's necessary work.

I'd invest in 1 garbage sorter than can work 24/7 and won't expect vacation time over 3 garbage sorters who come with all the flaws of being human. Like I responded to the OP, there are lots of costs associated with hiring a person that will be irrelevant if I put a machine in place to do the same work.

I think human society is at a point where if we don't utilize all of our abilities to increase productivity, we can't feed, clothe and house the entire population, but if we use all of those productivity-enhancing capabilities, a relatively significant number of people will be put out of work.

It is my belief that one of the reasons the market has rallied since March 2009 is that there was a realization that the worst of the downturn would be concentrated, from a labor market perspective, in the least skilled sectors of the population, who didn't really contribute all that much to consumption anyway.

 

[kashirin]

Quote from morganist:

It might create jobs but for how long?

If people don't do a sustainable job that has its own demand they will not be able to maintain it in the future. If there is no natural demand for what they are doing as soon as the subsidies end the jobs go. It is almost the same as subsidies. It would be better to support failing industries that could be a success in the future rather than just giving people a job.

Obama already supported green energy. it's fail and shouldn't be done again.

Do you know how much money are spent to pay people for doing nothing? food stamps, unemployment benefits ,all kinds of welfare? I bet creating 1.5 million jobs for 60 bln per year is not the most expensive item

but given how much money Fed prints those jobs can be sustained forever. Fed prints trillions every year. They could use just 60 bln $ of that amount to achieve their jobs goal instantly.

but better consider it as a stimulus but not wasting money on propping equity bubble but doing something helpful for anyone

and if economy pick ups someday and starts overheating those jobs could be slowly fazed out

 

[Grandluxe]

Draft all unemployed men above the age of 21 into the military. Call it the "A" unit. They will be paid military wages and benefits. They will also be considered as frontline infantry troops. All unemployed females will be drafted into support services.

Declare war on Iran, Syria and North Korea immediately and send in said military unit.

Use the spoils of war to fund the military unit.

Unemployment problem solved.

 

[kashirin]

Quote from logic_man:

All that type of work is going more to machines than people. to the extent it's necessary work.

I'd invest in 1 garbage sorter than can work 24/7 and won't expect vacation time over 3 garbage sorters who come with all the flaws of being human. Like I responded to the OP, there are lots of costs associated with hiring a person that will be irrelevant if I put a machine in place to do the same work.

I think human society is at a point where if we don't utilize all of our abilities to increase productivity, we can't feed, clothe and house the entire population, but if we use all of those productivity-enhancing capabilities, a relatively significant number of people will be put out of work.

It is my belief that one of the reasons the market has rallied since March 2009 is that there was a realization that the worst of the downturn would be concentrated, from a labor market perspective, in the least skilled sectors of the population, who didn't really contribute all that much to consumption anyway.

So go invest into garbage machine if you want

and government should invest into people. Because government doesn't operate like business

I guaranty you no matter how many garbage machines you buy - and I don't understand why you haven't bought any till now - people can be put to work for significantly small amount of money comparing to what Fed does now

if it's not garbage sorting then it's tree cutting or washing asses to dementia patients

there is a lot of work that can contribute to society and solve employment problem instantly