Friday, September 9, 2011

Job Creation and Stimulus Money

Normally, I don't get very political on this blog (well, maybe a little ;-)) But after seeing parts of President Obama's suggestions to jump-start (again) the economy, I have to put my two cents in.

I've read article after article wondering where the original stimulus money went to. Billions upon billions of dollars were spent cleaning up the housing mess and getting people back to work. But really, where did the money go?

Did it go into the hands of those affected by the housing bubble? No, it went to banks, who caused the housing bubble to begin with. Did stimulus money go to people looking for jobs? Yes, in a way, but not everyone qualifies for unemployment and even if you do, it does not replace your full income. You're lucky to get half.

Did the money go toward creating jobs? This is a trick question. How exactly does anyone create a job? Well from my point of view, you create a demand for products and services and someone who provides that service hires someone to help the company provide the service.

Unfortunately, that company is out to make a profit, and too much of the stimulus money went to the company and not enough went to actually creating jobs. I've read reports of millions spent to create a hundred jobs. Let's say $100,000 per new job created, or more. Did all the money go to the employee? I doubt it. That's where the problem lies.

And now another stimulus is in the works. Are we going to make the same mistakes as we did before? Or can we try something different? Here's a suggestion: Seed money for those that want to go into business for themselves. I'm not talking about loan guarantees. Loans are hard to get for businesses starting out, you have to pay them back, you have to pay interest and all kinds of other fees that make banks money, and which takes the money out of the hands of the entrepreneur. No, how about just giving that $100,000 you're planning on spending per new job and give it to someone who will turn it into a business that will hire others. That's your job creation program.

Of course, there's this project I have in mind. I did state in the book that I didn't want government money, but if Obama wants to give it away, well who am I to say no?

That's just a suggestion. Ignore me if you must, but don't blame me the next time someone asks 'Where did the money go?'