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Edited on Wed Feb-24-10 08:29 AM by Kurt_and_Hunter
Jobs Bill = $15 Billion
CBO estimates it will create between 100K and 200K jobs. Call it 150K.
Cost per job created = $100,000
Is that a lot or a little?
Since few jobs pay $100K it might seem like a lot. The government could obviously create more jobs and/or better paying jobs for less money.
But the tax cuts that will go to companies for hiring someone they would have hired anyway (the intrinsic inefficiency in this approach) are still money being put into the system. There is some small additional stimulative effect.
And with administrative costs, benefits and such the average cost of an employee is higher than the average wages paid. So $100K/job isn't as bad as it sounds when compared to just wages paid.
Inefficient, but pretty good by the standards of jobs creation via tax-cut. Thumbs up from me.
Here's the more interesting issue...
Throughout this economic crisis we have been doing stimulus and relief by inefficient means because everything has to be feed through the private sector. I support that approach. I think it works out better in the long run.
But then, I'm not squawking about the deficit.
But to someone who IS squawking about the deficit here is the thought process:
Do you want to create $150K jobs? Yes.
Well, the government could create those jobs for $8 billion, or we could create those jobs indirectly by spending $15 billion on a tax reduction.
Oh, well we can't have the government hiring people because that is socialism and besides, those are not "real" jobs. So even though my whole career is complaining about the deficit and complaining about government inefficiency I would rather spend twice as much to do something less efficient because the alternative would be the government doing something... and that's bad.
Punchline: If the government pays you to hire someone who you would not have otherwise hired, is that a "real" job?
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