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Using Public Jobs to Stimulate Private Enterprise

May 21st, 2010 · No Comments · Corporations and Industry, Economics, Energy, Jobs, Populism

During the Presidential campaign, candidate Barack Obama said he would spend $210 to create 5 million jobs. This was something like 500,000 jobs a year over ten years. In green jobs and in construction related to green jobs and infrastructure. And that’s nice. But we need 5 million jobs now. NOW.

And here’s how we get them. If you go to the White House stimulus summary page. (Recovery.gov) you will see that there is a total of $120 billion in tax breaks still to be given out. There is also about $170 billion in grants and loans still available. And finally there is left about $100 billion or so in entitlements. Now one would expect that the entitlements may be carved in stone…projected unemployment, food stamps..miscellaneous provisions for people out of work over a long period of time.

We can turn this whole thing around in a hurry by changing the way those remaining roughly $290 billion are spent.We should spend about $200 billion of it in directly hiring people to work for the Federal government. They can all work directly through existing Federal agencies and they can work right now through and with agencies that exist all over the country. But the hiring of 5 million people for one year is just the first step in the rejuvenation of the private economy.

Here’s how we do it.

Let’s just take five examples. There will be hundreds, many multiples of hundreds of government departments and agencies.

First, working with Native American families. We have departments for this. Just one, the ANA, which has probably never had any assistance in the form of supplemental people whatsoever, could handle its mission better, which is: to establish community-based projects that are designed to improve the lives of Native children and families and reduce long-term dependency on public assistance.

Sounds like a good thing to accomplish, wouldn’t you think We could probably use 50,000 people in that department, to teach, to help set up economic seminars, health clinics, etc. Probably simply teaching carpentry, plumbing and electric wiring would be worth fifty or sixty million dollars to reservations over a period five years. Enabling people to work economically, to rehabilitate their own homes, build their own homes, re-wire homes or maintain their existing homes.

Second, helping elderly Americans. We have an aging population. We have a Department of aging. We have training needs, information gathering needs, health needs, non-medical assistance needs, home restructuring needs and more. We have a current department that could hire people in a month and get thousands of people into the workforce. No question we could put a minimum of 100,000 people to work right away through the various cities and states with a program run by the Federal government. There are needs to be met immediately. We are not talking about one-on-one care that would be withdrawn after a year. We are talking about organizing volunteer programs, round-robin volunteers and centers that could be built around current facilities, churches, etc. that would remain after the initial workers have gone into private industry jobs.

Third, organizing the immigration situation. We need to organize an effort to identify and to calculate the number of illegal immigrants in this country. Then we need to put them on a list, establish addresses, educate them on their rights and prepare them for whatever will come next. In some cases it may be repatriation. In others it may be green card status. In yet others it may be relatively quick conversion to citizenship status. Whatever it is, we could use easily 5,000 people, on average, per state for this effort, about 250,000 people could be employed in this way for one year. This would be just in the cataloging and identifying sector.

Fourth, we could hire 200,000 people from those already in Texas, New Mexico, Arizona and California to work on the illegal immigration problem, whether it be filling in for border agents, doing paper work, watching surveillance cameras or building a wall, or all of the above. We must bring to an end the flow of illegal immigrants into this country. It has to stop and no better use of people’s time and effort could be made than to bring this situation under control for once and all. We are talking about a major effort to stop immigration into this country, send people back to Mexico, while at the same time, using the larger number of people to identify and to work out longer-term plans for those already here.

Fifth, conversion to alternative forms of energy. This is a huge area and may turn out to be a very economically sound one. We know that both the first as well as one of the most efficient forms of energy cost-efficiencies is actually home energy conservation. The skills to be able to assess this and make recommendations are not terribly high, which means that a great many people could be brought in. There are half a dozen jobs but here are some of the suggestions. Doing energy audits. Just like a home inspector, the person would be trained to go in and make an audit of a house and be able to make recommendations on solutions and costs.

Next, there would be needs for installers on various items. Under a certain formula, a homeowner could qualify for a tax break and a contractor could be helped to lower the cost by having some of the homeowners expense picked up by using the federal employees. Actual energy saving devices could be installed by these people who would learn how to do everything from caulk windows and doors, install energy efficient appliances, or insulation to installing wind turbines and solar panels.

Many of these people could switch right over to private industry. We could use as many as 10,000 of these people per state.

Thus far we have identified in only five departments about 1.1 million people who could go to work and be administered through no new departments of government, although some of those departments might need some additional administrative employees. These numbers would probably be lower, but another fifty departments each with needs ranging from 20,000 to 100,000 would be right behind them. We are talking about national parks and monuments, FEMA, the department of agriculture, Interior, reclamation, foreign service, languages for all departments, HHS in accelerating the new health care reform plan, HUD in handling the chaotic housing situation, housing for the homeless and reconstruction of damaged areas from hurricanes and now from the massive oil spill in the Gulf of Mexico.

All these jobs could be set up quickly and people could be working on them as one-year projects, with a couple of months for training and set up and ten months for completing the projects. At any time, workers cold peel off and go to the private sector. Certainly some companies are going to need workers on the beaches and in the marshes of the Gulf of Mexico to clean up that mess. There is plenty of excess potential home restoration in New Orleans. A city could come back and a fishing industry could be saved. It’s an average of 50 degrees in January in New Orleans and the livin’ is easy.

What are the economics of this program? $200 billion will create 5 million jobs at $40,000 per year. This may not be the exact amount but the mean or median. The point is that a minimum of ten percent of those funds will go into the treasury in taxes. So right away we are paid back $20 billion.

Then, in our 80% service economy, we know that one job in manufacturing or government will create one job in the private sector. So if we are talking about the same number of jobs at approximately the same amount of money, we could be talking about an additional net tax amount (incremental over what is already being paid) of about $10 billion.

So at the end of the first year we would already have paid back about 15% of the original investment. But we would also have replaced virtually all of the needs of the remaining $120 billion of the entitlements sector of the Stimulus budget. So our net here would be another probably at least half or $60 billion. This means that in the first year we have gained back a net $90 billion or almost half of our investment.

At some point in the year, certainly not in the first half, but definitely in the second half, the private market will begin to invest. They will be forced in. There will be good, sound investments and if the U.S. markets do not take advantage of them, foreign capital will begin to come in to fill up those institutions whose needs are not being met by U.S. underwriters.

This is where government has to step in again. We will need two pieces of legislation. One will involve incentives for domestic manufacturing and employment as well as penalties for foreign employment and production. The second will be import policies that raise some tariffs, a very wide but not steep set of tariffs particularly on products being manufactured by U.S. corporations abroad but being brought back into this country for sale.

Those two things will raise another $40 billion before even one of the government jobs is ready to transfer back into the private sector. So already, before the end of the second year, we will have repaid two thirds of the money we borrowed. We would have a slight letdown before kicking back into high gear with a restored and new economy that will grow and double in five years or less.

We can’t sit on our hands and let ten million people stay unemployed for another two years. The country cannot withstand it and continue anything remotely close to our current lifestyle. We are cannibalizing the country’s good will We are falling behind in so many areas and carrying a huge debt. The only thing that will change our future is to jump start the economy, get a strong tax base and a solid manufacturing sector into place. Don’t let anyone tell you it can’t be done. It can. And if the American people are still strong, it will.

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