You're welcome Mr. President (What the speech should include, but won't)
To me neither party has a clue on job creation. Both are too busy scoring political points or satisfying donors and their bases as opposed to really doing something. The Republicans only answer is tax cuts on everything and the Democrats want assistance for the poor and infrastructure projects. The following plan is one that I believe is middle of the road that directly creates jobs. Please keep in mind this is a rough draft and probably needs a little fine tuning. I also believe it would cost much less than what any of the others would but even if it does it would not be wasted money. It combines private sector incentives with public sector needs.
Lets start in the private sector. Namely small businesses. None of these ideas would apply to large corporations. I am not a fan of picking winners but business needs the right assistance and incentives to hire. The fallacy with tax cuts is that it assumes small business owners are in the top tax bracket when the evidence shows the many are not. Many are middle class. They enjoy being self employed and reaping the reward of what they created. Many fall nowhere near the top tax bracket so they don't see that much in tax incentives when they are handed out. Tax cuts just a blanket policy that throws money around instead of targeting it to get the biggest bang for the buck. Tax cuts assume businesses will create jobs out of thin air. We need to get businesses real, targeted assistance.
The first thing to do is create a govt funded grant/loan program along with something resembling a venture capital program. SBA loans are too complicated and govt needs to act fast. Developing a grant program where the money doesn't have a repayment plan would allow them to do that. Now would this be giving money away. YES. Here's why. It removes the risk so the business owner feels liberated to take what would have been one. Maybe they need to add on or buy new supplies, or better yet need more employees. They can now do that without fear of losing all they have. In an uncertain economy people are weary about risk and banks are afraid to lend. The only criteria for these grants would be job creation. You could have loans for established businesses looking to expand, but maybe not hire as many workers. Get the money in the hands of the people that want to create jobs and get it to them now.
Startup money could also be available for larger scale operations such as new manufacturing or new technologies. None of these could be tied to big business. They would need to be tied to companies just getting started. I would prefer these be targeted at manufacturing and in places that already have a solid manufacturing base.
You might say "why would we just give money away"? The government does it anyway with other subsidies but here are some numbers to help put this into perspective. Just one billion dollars could fund TEN THOUSAND small businesses to the tune of 100k each. That is a lot of businesses you are helping. Now lets put 5 billion there. You are helping 50,000 small businesses and creating jobs immediately. The original stimulus was 700 billion so this is just a drop in the bucket. Not even 1%, giving you loads of room if increases are warranted.
The next incentive would be a 10k tax credit for hiring an unemployed worker. Why unemployed? Because then you aren't just shifting employees around. You are incentivising businesses to hire workers who currently don't have a job and lower the unemployment rate. Again at 10 billion you are removing one million people from the unemployment rolls. Just over 1% of the original stimulus.
Now for the public sector. This is pretty straight forward. Any infrastructure project that can be ready to mobilize in the next 6 months is funded. Create a page like recovery.gov that lists all of the infrastructure projects and job postings for them. Public works projects are important but funding trains that won't be built for years is not the way to do it. Public works projects do something else besides employ people. They increase productivity. When the 405 expansion was put in it saved me nearly 30-45 min a day on my commute. It was nice to get that time back. Building and repairing roads and bridges is going to have to be done anyway. Lets mobilize a force to get them done now. We have plenty of people ready to work.
If it would help, the government could assist with relocation. If it was coordinated you could throw a couple families stuff on a truck and get them where the jobs are. Again it doesn't cost much and employs capable workers.
Another note about public works is that they have a multiplier effect. You are using American workers, using American materials, to build things used by Americans. In a resource rich country like ours we tend to not import steel and concrete. This employs more and more people.
In this plan I don't mention tax cuts for one reason. They don't work. They are a blanket policy and only throw money around. This plan removes some of the risk and as the Republicans like to say "uncertainty." I also don't mention assistance for the poor because that should be in a separate bill.
The reason this is focused on small businesses and startups is that it will foster competition with big business. Cisco, Apple, and GE have access to any cash they need. Small businesses don't have that luxury all the time. This would give them that and force big business to stay ahead or risk getting caught. The public works projects would directly fund job creating opportunities and let that money expand into the system.
This post wasn't to discuss anything but creating jobs. The tenets of this plan are designed to be an easy to understand, direct way to create jobs.
Lets start in the private sector. Namely small businesses. None of these ideas would apply to large corporations. I am not a fan of picking winners but business needs the right assistance and incentives to hire. The fallacy with tax cuts is that it assumes small business owners are in the top tax bracket when the evidence shows the many are not. Many are middle class. They enjoy being self employed and reaping the reward of what they created. Many fall nowhere near the top tax bracket so they don't see that much in tax incentives when they are handed out. Tax cuts just a blanket policy that throws money around instead of targeting it to get the biggest bang for the buck. Tax cuts assume businesses will create jobs out of thin air. We need to get businesses real, targeted assistance.
The first thing to do is create a govt funded grant/loan program along with something resembling a venture capital program. SBA loans are too complicated and govt needs to act fast. Developing a grant program where the money doesn't have a repayment plan would allow them to do that. Now would this be giving money away. YES. Here's why. It removes the risk so the business owner feels liberated to take what would have been one. Maybe they need to add on or buy new supplies, or better yet need more employees. They can now do that without fear of losing all they have. In an uncertain economy people are weary about risk and banks are afraid to lend. The only criteria for these grants would be job creation. You could have loans for established businesses looking to expand, but maybe not hire as many workers. Get the money in the hands of the people that want to create jobs and get it to them now.
Startup money could also be available for larger scale operations such as new manufacturing or new technologies. None of these could be tied to big business. They would need to be tied to companies just getting started. I would prefer these be targeted at manufacturing and in places that already have a solid manufacturing base.
You might say "why would we just give money away"? The government does it anyway with other subsidies but here are some numbers to help put this into perspective. Just one billion dollars could fund TEN THOUSAND small businesses to the tune of 100k each. That is a lot of businesses you are helping. Now lets put 5 billion there. You are helping 50,000 small businesses and creating jobs immediately. The original stimulus was 700 billion so this is just a drop in the bucket. Not even 1%, giving you loads of room if increases are warranted.
The next incentive would be a 10k tax credit for hiring an unemployed worker. Why unemployed? Because then you aren't just shifting employees around. You are incentivising businesses to hire workers who currently don't have a job and lower the unemployment rate. Again at 10 billion you are removing one million people from the unemployment rolls. Just over 1% of the original stimulus.
Now for the public sector. This is pretty straight forward. Any infrastructure project that can be ready to mobilize in the next 6 months is funded. Create a page like recovery.gov that lists all of the infrastructure projects and job postings for them. Public works projects are important but funding trains that won't be built for years is not the way to do it. Public works projects do something else besides employ people. They increase productivity. When the 405 expansion was put in it saved me nearly 30-45 min a day on my commute. It was nice to get that time back. Building and repairing roads and bridges is going to have to be done anyway. Lets mobilize a force to get them done now. We have plenty of people ready to work.
If it would help, the government could assist with relocation. If it was coordinated you could throw a couple families stuff on a truck and get them where the jobs are. Again it doesn't cost much and employs capable workers.
Another note about public works is that they have a multiplier effect. You are using American workers, using American materials, to build things used by Americans. In a resource rich country like ours we tend to not import steel and concrete. This employs more and more people.
In this plan I don't mention tax cuts for one reason. They don't work. They are a blanket policy and only throw money around. This plan removes some of the risk and as the Republicans like to say "uncertainty." I also don't mention assistance for the poor because that should be in a separate bill.
The reason this is focused on small businesses and startups is that it will foster competition with big business. Cisco, Apple, and GE have access to any cash they need. Small businesses don't have that luxury all the time. This would give them that and force big business to stay ahead or risk getting caught. The public works projects would directly fund job creating opportunities and let that money expand into the system.
This post wasn't to discuss anything but creating jobs. The tenets of this plan are designed to be an easy to understand, direct way to create jobs.
posted by Dustin at
9:19 PM
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