How To Save The Economy
Vol: 120 Issue: 19 Monday, September 19, 2011
President Obama said at a fundraiser at a private residence last week that his “American Jobs Act” that he wants Congress to pass without reading, “right away” will create 1.9 million American jobs.
“It’s estimated that the American Jobs Act would add two percentage points to the GDP, and add as many as 1.9 million jobs, and bring the unemployment rate down by a full percentage point,” Obama said, according to the official White House transcript of his remarks.
Wow. Is that a lot of jobs, or what? Actually, it must be ‘what’, cause it isn’t a lot of jobs. Not for the money they are costing.
The White House wants to spend $447 billion to ‘create’ these jobs. So how much is $447 billion divided by 1.9 million? That will tell us how much it costs to create one job under the plan.
I’m getting out my calculator . . . ok, ummm, no, wait! That can’t be right. . . Let me do it again. Just a second, and. . . WOW! I guess that is right. You can put 1.9 million into $447 billion 235,263 times.
So, that’s the Obama Plan. Spend $235,263 (almost a quarter million dollars) per job.
Let’s say you get one of these jobs. And let’s say that each of those new jobs pays what amounts to the average income for the bottom 90% of all workers, excluding the rich and super-rich, since most of us are not part of that top ten percent.
So what is the average annual salary for a typical American worker? According to a study by UC Berkeley, the average American job, (excluding the richest ten percent), pays $31,244.00 per year.
So under the Obama plan, the government will spend $235,263.00 to create a job that will pay you six hundred bucks a week. That’s the plan.
At that rate, it would take seven and a half years before your earnings equaled what it cost to create that job. The government hopes to tax those jobs, so just for fun, let’s say the government planned to tax those jobs at the highest existing tax rate of 38%.
For every six hundred bucks you earn, the government will claw back $228 in taxes. So, at $228 per week, how long will it take for you to pay back the initial outlay of $235,263.00 in taxpayer money that created your job?
Say, if you started “right now” — before anybody reads the bill? The $235,263.00 the government invested in your job will break even in just under twenty years.
Assuming all goes well and you don’t get a job at a place like, say, Solyndra where $535 million created 1100 jobs that only lasted for three years. (That averages out to $486,363.00 per job).
The rule of thumb for hiring is that the worker you hire generates more income for your company than it costs to hire him. Otherwise, you wouldn’t hire him. It only sounds cruel if you are the guy not getting hired. If you are the guy writing the paycheck, it only makes sense.
I am trying to imagine a private sector business scenario in which somebody like Warren Buffet, Bill Gates or some other multi-billionaire invested nearly a half million dollars for each job created.
Give an entrepreneur a half million dollars and he’ll start a company and hire five workers.
But give Barack Obama $38.6 billion in loan guarantees earmarked for green jobs subsidies, and he’ll hire 3,485 new permanent jobs at a cost of $4,850,000.00 per job.
Not to worry, however. Obama plans to pay for it by adding $1.5 trillion in new taxes.
“And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.” (Revelation 6:6)
Obama has other plans for raising enough money to throw away on his various economic central planning schemes. One idea being floated is to cut the benefits of federal retirees.
Not unionized federal retirees – that would bring down the wrath of the unions on Obama. Instead, Obama wants to go after military retirees. What are they gonna do? Quit?
Here’s how the New York Times explains it.
Under the current rules, service members who retire after 20 years are eligible for pensions that pay half their salaries for life, indexed for inflation, even if they leave at age 38.
They are also eligible for lifetime health insurance through the military’s system, Tricare, at a small fraction of the cost of private insurance, prompting many working veterans to shun employer health plans in favor of military insurance.
Advocates of revamping the systems argue that they are not just fiscally untenable but also unfair.
So the military has it too good — if one is committed enough to one’s country to serve the full twenty years. If one simply joins the military to learn a trade and develop skills they can use in civilian life, well, what about their retirement benefits? They don’t get anything – the retirees are hogging it all!
Those critics also argue that under the current rules, 83 percent of former service members receive no pension payments at all — because only veterans with 20 years of service are eligible. Those with 5 or even 15 years are not, even if they did multiple combat tours. Such a structure would be illegal in the private sector, and a company that tried it could be penalized, experts say.
“It cries out for some rationalization,” said Sylvester J. Schieber, a former chairman of the Social Security Advisory Board. “Why should we ask somebody to sustain a system that’s unfair by any other measure in our society?”
Indeed! We should remedy this imbalance right away! So . . . let’s cut benefits for retirees. It will save money now, by breaking faith with those who have already dedicated their lives to military service, and it will save money later, by discouraging anyone from staying in long enough to collect pension benefits.
A wild-card factor in the debate is the withdrawal of American troops from Iraq and Afghanistan, which some experts say could avoid the stigma of cutting benefits while troops are at war.
Absolutely! We wouldn’t want to stigmatize the politicians that favor rewarding a lifetime of honorable military service by reducing their retirement benefits! So this is the PERFECT time to, ahem, screw those military veterans who didn’t have the decency to die in combat.
“The fact that you are getting out of Iraq and Afghanistan does make it easier,” said Lawrence J. Korb, a senior Pentagon official in the Reagan administration who was a co-author of a recent proposal for reducing the cost of military health care. “When the war in Iraq was in terrible shape, it was hard to get people to join the military, and no one wanted to touch any military benefits.”
“By far the most contentious proposal circulating in Washington is from a Pentagon advisory panel, the Defense Business Board. It would make the military pension system, a defined benefit plan, more like a 401(k) plan under which the Pentagon would make contributions to a service member’s individual account; contributions by the troops themselves would be optional.”
Defenders of the plan to cut retiree benefits argue that the rising cost of retirees will affect the ability of active-duty personnel to do their duty.
“If the trend continues, it will call into question the military’s ability to do other things, like buy equipment, do maintenance, train troops and equip them,” said Nora Bensahel, a senior fellow at the Center for a New American Security, a nonprofit organization with ties to the Obama administration.
“At some point, the cost pressures by the retirement benefits will really start to impede military capabilities.”
I think I can nail down exactly where that point might be. It might come at the point hardly anybody will join the military unless they get drafted. I remember those days.
In 1969 I was a private making $118.10 per month when one of my drill instructors, (who was nineteen years old and had been in the Marine Corps less than two years), was promoted to Staff Sergeant — because most of the older, more experienced guys got out as soon as their military obligation was completed.
So, as near as I can tell, here is how Obama plans to save the economy between now and November 2012.
First, we surrender to al-Qaeda and the Taliban and turn over Iraq and Afghanistan to them. Then, we rip off military retirees.
Finally, we take the money we’ve saved by surrendering to al-Qaeda, gutting the military and ripping off retirees and we give it to the Democrats so they can create a bunch of million-dollar jobs that pay thirty grand a year.
What? You don’t think it will work?