A Cure for Unemployment

Here's Jesse Jackson Jr claiming he has a fix for our unemployment problem. A fix so simple we should have thought about its years ago -- have the government hire the 15M unemployed people! Mind = Blown, right? JJJ makes it sound so easy -- for just $600B (at $40k per head), we can hire every one of the 15M unemployed people (to do what, Jesse doesn't say). For another $104B, we can bail out all the states, and for another $100B, we bail out the cities. So for only $804B, we can have a hugely successful stimulus bill that will put everyone back to work.

Let's think about that for a second. First, let's consider the $600B number. While that number is accurate ($40k x 15M = $600B), it doesn't tell the whole story. In the real world, salary is only part of the cost of hiring an employee. Employee overhead (which includes various payroll taxes, health and retirement benefits, etc..), is typically estimated at about 20%, so that $40k number actually becomes $48k. Now when we do the math we're looking at a more accurate number of $720B per year. And bailing out the cities and states won't fix their structural spending problems. It simply gives them another excuse to put off making difficult choices, effectively making 1 state's residents pay for the fiscal mistakes of another.

Triple J suggests we continue this "jobs program" for 5 yrs. That means on top of all the other deficit spending we'll likely continue (unless we wise up and get Gary Johnson into the White House in 2012), the national debt will increase by another $3.6T. And what do we do when this magical jobs program expires? Has JJJ considered the effect of what 15M new unemployed workers will do to this economy? Of course he has -- it would be magnitudes more damaging than what we experienced in 2008. Which is why if this program were to become reality, it would assuredly become a permanent program, a thought that no doubt sends the public sector unions into a tizzy. And the money to pay for all this? He must think it comes from unicorns and pixie dust, otherwise he'd realize that taking $3.6T out of the economy will do nothing but inhibit real economic growth.

I can't believe there are people who actually think like this, nevermind somehow get elected.