Friday, September 30, 2011

The President's Latest Stimulus Proposal

From a NY Times Editorial:
According to Mr. Zandi, President Obama’s $450 billion jobs plan could add 1.9 million jobs in 2012 and cut the unemployment rate by a percentage point. With interest rates so low, the government could easily pay for a bigger program.

Wow that is $459 billion / 1.9 million = 241,578.95 per job! One would hope that would make Mark Zandi against this stimulus plan but not so. He is for the plan.  Now I admit that you do get some stuff for the money not just jobs, they are not digging holes and filling them in. I also admit that this is a great time to get ahead on building and fixing roads and bridges and some of the proposed stimulus is in tax cuts which is almost free.   All tolled thought, $241,578.95 per job is still seems like a very expansive way to create jobs but since the median voter seems to demand jobs programs we should find cheaper ways to do it.

Perhaps this simplest way would be to replace the minimum wage with some kind of wage subsidy.  The recipient would get the bast wage that he can find and the Government would pitch in enough to get the recipients income up to some acceptable level.  We are already paying those who are still eligible to collect unemployment so we might as well pay them to work rather than paying them to not work!


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