Wednesday, November 17, 2010

Jobs by the numbers

  2 months ago I made fun of the I-JOBS program spending $618,618 in a recession to renovate the old Marshalltown Library into a refurbished City Hall, creating a grand total of 10 non-permanent jobs in the process. At the time, I considered this a very poor return on investment, but I was not looking at the big picture. It seems as far as government job creation goes, I-JOBS is a model of efficiency.

  Chairman of the Federal Reserve Board Ben Bernake has been on Capitol Hill defending his newest plan to revive the economy and create jobs by buying 600 BILLION dollars of US Treasury Bonds over the next 8 months. Last year the government spent 700 BILLION dollars in a stimulus program that was supposed to keep the unemployment rate from rising under 8 percent (it is currently at 9.6 percent) and create or save between 3 and 4 million jobs.

  Bernake has claimed that buying 600 BILLION dollars worth of US Treasury Bonds could create 700,000 jobs over the next 2 years. He presumes that buying the bonds will lower interest rates, which will allow individuals and businesses to get loans, which will promote spending, which will create jobs, which will reduce unemployment.

  I’m no economist so maybe that’s why I can’t see how buying a bunch of bonds will create a lot of jobs. Maybe a few jobs will be created for the brokers that sell the bonds, the printers that will print the money to buy the bonds, and then a few more jobs for people who will be washing the cars, mowing the lawns, and cleaning the homes of the lucky brokers and printers.

  I’m not sure how lowering interest rates will help the economy this time. Interest rates are already at an all time low. If people borrow a bunch of money to buy TV’s and computers that aren’t made here, the only money that will stay here is the commission that the salespeople get. I’d like to see the government give money to US manufacturers to produce goods here that can be sold competitively overseas. That is the only way to create jobs in this country that aren’t consumer driven.

  I took out my special calculator with room for big numbers and saw that Bernake’s job creation plan will spend $857,000 for every job he hopes to create. I don’t see why Bernake wants to go through this roundabout process to create all the jobs. Why not find 700,000 working families and give them $43,000 a year for 20 years to not work? Then there would be 700,000 jobs open for the unemployed. We could do this even cheaper by selling raffle tickets to see who would be part of the ‘newly retired’. Not only would the government make money by selling the tickets, there would be extra job creation in convenience stores all over the country selling raffle tickets.

  In any event, the I-JOBS $61,000 per job for the 10 jobs renovating City Hall seems like a real bargain now.