Posted by swamphawk22 on 8/12/2010 4:02:00 PM (view original):
Or better yet, all the salary for 10 million workers, $400 billion. lower than any stimulus plan i have heard of!
That's a pretty bad plan swamp.
Let's assume your best case scenario, where the 'stimulus' money is used to pay 100% of the salary for the newly created jobs. These positions would still create an additional cost burden on the company from the perspective of management overhead, HR time, insurance claims, etc...and this cost burden would not be offset by selling any additional wares. The only way that creating these positions benefits the company creating the jobs is if the market exists to sell the product or service that the company sells. If that market existed already, then the companies would be lining up to hire the folks already in order to increase their capacity...no stimulus required.
I believe that fact of the matter is this: America has been shouldering far too much of the 'burden' of being the consumption arm of the world economy over the past few decades. We did this as a result of our almost insatiable need to "keep up with the Joneses" and financed it through credit cards and other lines of credit that were not actually justified in terms of our ability to pay for the products we bought over the long term. Now that these unsupportable credit markets have collapsed, so has our ability to be the primary engine of global demand. As a result no one is making as much as they used to. It is a natural correction for a dramatic inefficiency in the economy, even if it is painful.
Putting government money into arcane plans to artificially inflate employement numbers is treating a symptom not the root cause.
If you are a believer in this trickle-down economic theory why not just give the stimulus money to the unemployed directly so that there are no associated overhead costs for the firm that would create the jobs? That way these people could continue to buy things, companies will need to hire more people to keep up with demand and ultimately everyone benefits, right? Sounds a lot like current unemployement and social security programs to me.