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Obama’s Jobs Plan

There are some things that we could be doing right now to put our neighbors and our friends, some family members back to work. There is no reason why we should not extend a payroll tax cut that put $1,000 into the pockets of every single family out there.

There’s no reason why we shouldn’t put Americans back to work all across the country rebuilding America. As I was driving in here, I saw that a new fire station is being built, thanks to the Recovery Act. Well, we need roads and bridges and schools all across the country that could be rebuilt.

Barack Obama
August 17, 2011

After a taxpayer funded political campaign tour of the Midwest, Obama promised to share “yet another” Jobs Plan with the rest of us once he finished his 10-day vacation with the Rich and Famous in tawny Tisbury on Martha’s Vineyard.

Meanwhile, his minions have been “leaking” details of his new, new Jobs Plan in an effort to distract the nation from focusing on the millions without jobs and the near recessionary lack of GDP growth.

I have pieced these leaks together to paint a fairly good picture of what Obama’s latest and greatest Jobs Plan will look like for you.

Not only is this not a very pretty picture, but it's one that will not produce jobs, but rather expand the black cloud that’s been hanging over the US economy ever since the democrats took over Congress in 2007.

The Economic Power of $19/week

In December of 2010, Obama and the democrat controlled Congress finally realized that it would be economic and political suicide to allow the biggest tax increase in history to pass without a vote (AKA the expiration of the Bush Tax Cuts).

Then, in order to keep Obama from vetoing it, they “tossed him a bone” with a 2% cut in the so-called payroll taxes. Understand, it’s not a tax on Payroll, it’s a tax that funds the Social Security Trust Fund and it wasn’t cheap. Obama’s bone cost the insolvent Social Security system $120 billion it doesn’t have!

To put that number in perspective, the CBO’s politically biased analysis of the so-called “tax cut for the rich” might have brought in an extra $70 billion in tax revenue (assuming that none of the wealthy took their money elsewhere, which is a stupid assumption based on history).

It's Not the $19, Stupid!

Of course the reason small businesses aren’t hiring isn’t because people don’t have an extra $19 in their pockets. Seriously, does anyone believe for one second that the temporary $19/week average increase in take home pay during a recession is going to spurn any economic growth? In fact, this entire amount could easily be sucked up by the spike in fuel costs that were caused by Obama’s anti-energy policies.

But just assume for a minute that “the middle class” spent their $19/week on something other than a tank of gas. What would they buy? Beef instead of chicken; wine instead of beer, Target instead of Walmart? Even if everyone dumped their 19 bucks in the same place, would any good jobs get created

Ask any private sector business owner while they're not hiring and they'll all tell you the same story. It’s because Obamacare, the Frank/Dowd Financial Regulations, and the constant threat of tax increases has created a government imposed financial burden that jacks up the cost of a new hire by tens of thousands of dollars; not $19.00.

Consider this, according to the CEO of New Jersey based Bogen Communications -- "It Costs Our Company $74,000 To Pay An Employee $59,000--Of Which She Keeps $44,000." Where does the missing $30,000 go -- Government taxes, where else?

Perhaps the payroll tax cut should have been on the employer contribution side.

The truth is that Obama's so-called tax holiday did nothing to create jobs, but did dramatically increase the inevitable bankruptcy of Social Security.

I call that stupid!

Forgive College Loans to Steal Urban Doctors for Rural Votes

I’m not sure how any sane person can look at this idea and not conclude two things:

1. It will not create a single new job on a national level.

2. It is nothing more than a waste of taxpayer money to buy Obama the white votes he's lost at the expense of inner city blacks, who will never vote for a republican.

As you may recall, one bizarre component in Obamacare was the government takeover of the National Student Loan program. This gives Obama the ability to forgive loans when it suits his agenda.

Last week, while tour the Midwest, Obama said that his Jobs Plan might include an incentive program to get doctors to move to Rural America by forgiving some or all of their college loans.

This is yet another political scam; according to Stephen Bronars, senior economist with Welch Consulting in Washington, D.C:

“If this rural physician is displaced from an urban or suburban area, there may be one fewer physician in urban and suburban areas, which could lead to less revenue and fewer jobs where the physician would have otherwise been placed.

The net impact of this program on jobs must account for both the increase in health services provided in the rural communities and the decrease in services provided in other areas, which will likely lead to lower job creation numbers.”

ABC News August 17, 2011

I smell vote buying with taxpayer money – don’t you?

Certainly, no new jobs here!

Ring That Infrastructure Bell!

The next wave of “big new ideas” that leaked out all fall under the banner of “infrastructure” (formerly known as shovel ready projects).

Repair Schools: According to the Philadelphia Inquirer, “The jobs package that President Obama plans to announce shortly after Labor Day could include tens of billions of dollars to renovate thousands of dilapidated public schools…”

The Infrastructure Bank: To be honest, I’m not quite sure how this differs from “Stimulus for Shovel Ready Projects,” other than the clever new name. The theory is that private sector businesses and individuals are supposed to “invest” their own money in this “bank,” which the government would “stimulate” with $100 billion in taxpayer money.

It’s actually not a new idea, they’ve been doing this for years in Japan, but according to Forbes, the Japanese Infrastructure bank has become the world’s largest political slush fund; further:

“Politicians at all levels direct its funds to voters, constituents, friends, and relatives for infrastructure, construction, and business loans. They basically use it to buy votes, curry favor, and get rich. They waste depositor money for political gain.”

Of course, we don’t have to fear that happening here, John Kerry (Senate Massachusetts) has assured us that “The bank will finance economically viable projects without political influence.”

Spending The Most Money for Fewest Jobs

Something magic happens when a person gets a job; they feel good about themselves, they get “hope,” they get off the public dole, and with any luck, they start paying taxes.

The funny thing is, most of this “goodness” happens even if it’s a low paying job with no real career opportunity’ it’s simply good for the soul to be productive.

The private sector is very capable of creating basic jobs that cost less than $40,000/year using their own capital, if the Government will just get out of the way.

Ponder that for a minute; new jobs, no government spending, reduced entitlements, more tax revenue, doesn’t that sound good?

Now ponder the kind of jobs Obama is trying to create. Mostly DPW (Department of Public Works) jobs that pay big bucks. We know that the average federal government worker costs twice as much as the private sector counterpart. And while the wage disparity in State and Local wages isn’t as great, it’s still more expensive to hire a government worker.

I don’t want to disparage my government worker friends, but how often have you driven by highway work crew and seen DPW workers leaning on their shovels?

But that’s not the biggest problem with Obama’s idea of a “good job,” my problem is the lifetime “tail” that follows these political hires.

Union protected government workers can never be fired, which means that they’ll be on the taxpayer payroll for 25+ years, plus a fat pension for the rest of their lives. Don’t forget the great healthcare and long vacations we pay for!

Do The National Debt Math

The mathematical difference between an "Obama Dream Job" and a basic private sector job is staggering.

Let's start with that private sector job. In 2003, 1998, 1982 and 1963, presidents Bush, Clinton, Reagan, and Kennedy spurned new job growth by dropping the marginal tax rates and/or capital gains rates by a few percentage points. In all four cases, employment skyrocketed and the recessions they inherited all disappeared.

A person who believes that tax policy has no impact on hiring might claim that these cuts cost the country lost tax rate revenue, bit even if you believe this hooey, the number would be very small.

If you look at a typical small business, it grosses a million dollars a year in sales and probably earns a 15% profit in good times and thus pays about $37,000 in taxes. If you were to cut their tax rate by 5%, it would cost the Treasury a mere $2,500, but make them feel much better about their prospects for future profits.

Companies that feel good about their future profits tend to expand and hire more people. And while not every small business that got a tax break would hire someone, you can bet that 10-20% of them would. And of they did, that "New Job" cost the tax payers no more than $12,500 to $25,000. But if the company that hired that employee grew and paid more taxes, it would cost less, maybe nothing!

Whatever it is, that's what gets added to the National Debt.

Now compare that to an Obama Infrastructure job. The average State and Local Government worker costs the taxpayers $69,913/year. They work an average of 30 years, followed by a 20 year retirement on a taxpayer funded pension.

Want the numbers?

30 Years of Salary and Benefits with 2% Annual Raises: $2,836,236
20 Years of Public Pension at 80% with 2% COLA: $2,662,205

And the grand total is about $5.495 million over the next 50 years and all of it must be borrowed from China or printed by Bernanke and all of it will increase the National Debt of the United States!

This is why I write this blog and this is why Obama is the most dangerous president in the history of the United States.