A real solution that can buy us the time we need...

Discussion in 'Economics' started by Mvic, Feb 8, 2009.

  1. Mvic

    Mvic

    In the long run and if this were simply a run of the mill recession I would agree, but because this is as much about giving people the funds to afford their mortgage and credit cards, and incentivising private money to get back in the game, including corporate money, people need their jobs back. The work is there, this would be a boon especially to many small businesses that are currently unable to afford employees that they actually need. Just sending 20K to the individual would not get things back to a semblance of normality and instill confidence. It would also rasie the cost as with higher salaries (ie $20K gets you a $40K employed person) more taxes would be paid to states and the fed, the cost of the stimulus would go down and states would benefit and not be in such desperate need of federal assistance.
     
    #11     Feb 8, 2009
  2. Mercor

    Mercor

    Once a company decides to accept this program. Can he ever fire the employee? Does the company get the money up front. Can the company fire the employee once the 20K is up?Does company have to match social security, 401k?
     
    #12     Feb 8, 2009
  3. I was thinking cheap(er) labor, 30k/40k jobs. Nothing special but enough to survive if someone was in a pinch and needed a job. These people wouldn't be concerned with 401k, more like how they are going to survive the next 1-2 years.

    Employers would be credited at tax time?(I don't really know anything about these credits, just an idea i had) if they have a NET gain of employees. Said employees can be fired for logical reasons, but employer loses that credit, but can fill position and "remake" the credit.
     
    #13     Feb 8, 2009
  4. "A real solution that can buy us the time we need... "

    The title of this thread seems contradictory.

    A real solution? Yet all it does is buy time?

    How about fixing the wrongs and purging the excesses?

    Makes no sense to me.
     
    #14     Feb 9, 2009
  5. Mvic

    Mvic

    Fair enough, I'm no wordsmith. The "real" part was in relation to the currently reported version of the stimulus that is not a a real jobs producer and will do little to nothing to solve the underlying problems that are flushing us down the deflationary toilet.

    Time is what we need to work off the exesses, to regain confidence both by consumer and lender, and for inflation to reappear. Time to allow the business cycle to start working again, it is currently interupted by the crisis in confidence.

    Once we are out of the death spiral we can and should address the sytemic issues that helped cause the crisis. The time for a major overhaul is not in the middle of a storm, get through the storm 1st the most efficient way you can, then when in calmer waters fix the ship! The jobs plan I propose gets us to those calmer waters without sinking the ship in the process by weighing it down with so much additional debt.
     
    #15     Feb 9, 2009
  6. Mvic

    Mvic

    Net gain sounds like a good way to go and it goes without saying that these all have to be US based workers. The higher paying jobs would be better because in order for consumer confidence to return we need people to feel as though they have a cushion and are not precarioulsy just scrapping by.
     
    #16     Feb 9, 2009
  7. You assume too much. There is no way out of the death spiral.

    And your "solution" is just a band-aid, like all the other "solutions" which were meant to buy time.
     
    #17     Feb 9, 2009
  8. Mvic

    Mvic

    Net gain mentioned by darkhand makes sense, solves the problem of necessity of firing for performance related issues. Company could offset at quaterly tax filings or overall corporate payroll tax if it is a large enough company or simply have a mechanism whereby they get the cash upfront when they file the new employees w-4.

    There should probably be a gaurantee of at least 36 months employment both by corp and gov. With full match for 1st 2 years and match gets cut in half the third year. The number crunchers would need to come up with the optimal algo.
     
    #18     Feb 9, 2009
  9. Mvic

    Mvic

    Throwing 4-8M decent jobs at the economy would have a drammatic effect and would probably stop the death spiral of defaults and foreclosures and the crash in consumer spending and the state budget shortfalls. Yes it is a band aid solution but it provides the most bang for the buck of any that I have seen proposed and relatively cheap. Do you really think that there will be no stimulus and if this one passes in it current form I will wager any amount you want that there will be another one withon 24 months because this iteration will not stop the death spiral, only massive short trem job creation will.
     
    #19     Feb 9, 2009
  10. jjf

    jjf

    You will probably find that if you give money to Corps and/or people they will use it to retire debt.

    We are in a period of unwinding leverage [debt] and nothing will prevent this period from running it's course as painful as it may get.
     
    #20     Feb 9, 2009