As a retired businessman, there are some things I just don’t understand. The proposed jobs program by president-elect Obama is one. This is addition to bail outs and uncontrolled government spending.
When a business in America succeeds they create jobs. From those jobs, goods and services are produced. Consumers buy those goods and services to fulfil needs. The money from consumers pays for the jobs and some profit, which pays the business owner and pays taxes to the government. Obama plans to raise taxes on these businesses and business owners. This should result in more jobs lost.
With Obama’s plan, the government contracts to have the infrastructure improved in the U.S. They give the money to states to do this. The states, in turn, pay the contractors to rebuild the infrastructure. This pays for the wages of the employees and the profit to the contractor. This is all a good idea since the infrastructure in this country has been neglected far too long. It is a much better idea than creating more government jobs since nothing gets produced with most government jobs.
Here’s my problem. If this stimulates the economy, as it should, where do the goods and services we need come from? If the goods are exported, then those jobs are exported for the long-term. If they are produced here, how does the manufacturer find the workers to produce them if the workers are employed on government contracts. If service workers go to work for the government projects, how do service worker employers find workers?
Also, 100% of the funding for all this work comes from your tax dollars. Is this just a different form of welfare or socialism? A better form, but still one where people who pay taxes or successful businesses pay to have the infrastructure improved at a time when there is precious little money to do that.
If the economy turns around, where do the materials come from to supply the turnaround and the huge infrastructure projects? Last year there was not enough asphalt to complete the funded highway projects. Concrete, steel, and all construction commodities will have to be designated for the public works projects. Where does the private sector get the commodities needed to get back into business?
What is the time lag? Eisenhower built the interstate system in record time. In Chicago there was an extension of an interstate that took 10 years to build. About a year a mile. Lawsuits came from everywhere. Homeowners, environmentalists, and the normal sources.
Obama says it’s first come, first served for the states. Do states mandate no lawsuits?
For many of these projects there are only a handful of contractors who do this kind of work. Will there be a windfall profits tax on these contractors? As soon as this begins, the minority business issue will hit. How can minority contractors be set up fast enough and get ample financing to get in the game? Jesse Jackson will be quick to make this a top priority.
Schools are top on this list. Will the Federal Government lend money to the community to rebuild schools, or will the Federal Government take over the local control of schools? Most school spending requires a vote. Will this be a loan and will that require a vote?
Unlike the Big Three who were asked to write their business plans before they could even discuss money with congress, Obama gets a pass. He can discuss this ad nauseum with us but not be expected to have detail one. Another of those big sweeping ideas that are just part of the public opium we inhale that puts us back into a let’s trust them stupor.
Here’s my bet. Before the first shovel hits the earth, the unemployment in the U.S. will top 15%. By the time the first shovel hits the ground the recovery will have started and this massive flow of your tax dollars will postpone or delay the recovery. When everyone goes to work on government funded projects, private business will not be able to compete for wages or materials. When the government projects are done, there will be fewer private projects to go back to. Sounds like a cycle to me. A cycle we don’t want.
Here’s my suggestion. One most of you won’t like. Put a $3.00 Federal tax on gasoline. This will fund the jobs program. And, it will save the auto industry in this country and force conservation just as it has done most places in Europe for twenty years. It will force an energy strategy. Not one dime of this is to go to anything except the infrastructure project.
Realize it won’t be a jobs program for at least a year. Address the jobs issue by not taxing business and by making this country a less hostile place to do business.
