President Obama recently released his plan to create jobs. Basically, he’s playing politics by giving Congress a bad bill and urging them to pass it quickly. As usual, he left it up to Congress to work out the details and to figure out how to pay for it. Or, more accurately, he left it up to the so-called “Super Congress” to find spending cuts to cover the cost of this $450 billion plan.  I don't trust this Congress to come up with the cuts to reduce the deficit, let alone come up with spending cuts to "pay for" a $450 BILLION "job creation" plan.
 
One of the stupidest provisions is another extension and expansion of the payroll tax cut. The payroll tax is the tax that funds Social Security and Medicare.  Since Social Security and Medicare are already in deep doo-doo from idiotic policies--like loaning the surplus money to the federal government--reducing the amount being paid in only worsens the situation and strengthens the argument against Social Security. 

The money saved isn’t enough to fuel much demand. They claim the “typical working family” would save about $1500, and they expect this to fuel demand for cars and restaurant dinners. Not bloody likely. First of all, that figure is too high--and notice, it’s “families”, not “individuals”. $1500 isn’t even enough for a down payment on a car anymore, and even if it was, people at this income level aren’t likely to have the credit necessary to get the loan at this point.

This is kind of like the stimulus payment. It didn’t work, because it wasn’t enough. People used the money to pay off back bills. There wasn’t enough left over to spend on goods. And this is $1500--more likely less--spread out over 12 months. To fuel significant job creation, demand needs to be widespread--meaning a decent number of people patronizing the same stores or buying the same kinds of goods--regular and substantial. $1500--likely less--per family for a short period of time--one year--isn’t going to do it.                                                                      

Another stupid provision is the unemployment benefit extension. Not that it isn’t important, because it is, very much so. But it does not belong in a job creation package. Neither does budget “gap funding” to states.

Rebuilding schools is good, but limited. Not every school needs to be rebuilt. These jobs would be very localized, and very temporary. At this point, our entire nation is in trouble. Localized, temporary job creation via school rebuilding isn’t going to do it, just as temporary, localized job creation via monument repair and re-sodding didn’t do  it.                                                            

I’m fine with hiring teachers, provided that schools actually need them, and provided that the locals won’t get stuck with the cost.  School budgets are high enough, and so are property taxes.  If schools need teachers, and can afford them, they should have them already.  If schools CAN'T afford them, what's going to happen when the money to hire teachers runs out?  Are local districts going to be on the hook for extra teacher salaries that they couldn't afford in the first place, or for unemployment for the teachers they had to let go when the money ran out?

Yet another stupid provision is temporary tax breaks for businesses who hire new workers. Businesses need to know that they have enough work to employ workers for the long haul. A one-time or temporary tax cut will not help, unless workers are already needed, because workers who are let go due to lack of work are generally eligible for unemployment, which is bad for the business. Suspending unemployment eligibility during, say, the first year of employment MIGHT help. That year could then be added to the worker’s credit if he/she remains employed when the year is up.  Another solution would be to make the worker subject to normal unemployment regulations if fired within the first 18 months of hire for any reason other than lack of work; workers fired for verifiable lack of work would go on the government's tab.

So, we have a jobs plan that won’t create many jobs. It will be expensive. It will substantially harm Social Security and Medicare. And it’s supposed to be paid for with cuts made by the so-called Super Congress, so those receiving any kind of assistance should expect some serious additional pain, a la the cut to Medicaid funding.

America has had enough of expensive plans that aren’t particularly effective. We don’t want some good provisions at enormous expense; we want ALL provisions to be effective, and we don’t want it to break the bank. Plans also can’t affect assistance programs that these yet-to-be-hired workers are using to survive, because they are using them to SURVIVE.  And as time goes on, more people will need and be eligible for assistance, rather than fewer.  Eligibility levels for assistance programs are already too low, meaning that many people who need assistance aren't eligible.  We, as a nation, are in big trouble, and "trickle-down" economics has not served us well.  What we need is job creation and economy stimulation that works from the ground up.

Trickle-up economics has three requirements: some money, people who will spend money, and people who need work. We start by ensuring that the money makes it into the hands of the people who will spend it, and there are various ways to do that. The people spend, creating demand for goods and services. The businesses that produce these goods and services need to hire more workers to meet the demand. These new jobs place more money into the hands of more people who need it, and will spend it. When they spend their paychecks, this creates even more demand and necessitates the creation of even more jobs, and so on. Sounds good, right? So where do we start?

 
1. Fix Social Security: This can be done with four small reforms.

Immediately stop loaning the Social Security surplus to the federal government, as WE are the ones who will have to pay it back, in essence paying for our eventual benefits twice over, or more.  The federal government can only raise money by taxing the public, or by borrowing money, which must be paid back, with interest.  In both cases, the taxpayer is the one on the hook.  With regard to Social Security, we would be paying ourselves back for our own money, with our own money, which doesn't make a lot of sense.

Immediately end the ridiculous payroll tax cuts. I guess President Obama didn’t realize this, but when a vital program is underfunded in the long run, YOU DO NOT REDUCE CONTRIBUTIONS TO THAT PROGRAM. POTUS Obama, a simple formula for you to memorize: reduced contributions = more trouble. Learn it.  PLEASE.

Next, end the tax cap on earnings over $106K. Very few wealthy retirees pass up their Social Security checks, so why should they pay tax on only a portion, when the poor and middle class who make less than $106K pay on ALL their income? Who cares if the wealthy don’t need it; if they are eligible to collect it--and they do--they need to pay for it just the way everyone else has to. That safety net is there to help them, too, if the stock market crashes viciously, and their offshore tax shelters are wiped out by a nasty typhoon [well, we can hope]. You can bet they’d be first in line to cry to the government when they found their pockets empty.

Finally, increase contributions from everyone by a measly little 1%.

These reforms would end the incentive for Congress to kill Social Security in order to avoid paying back the trillions of dollars in surplus they have borrowed from the Social Security trust funds. It would stabilize Social Security for the long haul. And it would allow us to use Social Security to stimulate the economy by increasing benefit payments to 50% earnings from 1/3 earnings. This places more money in the hands of people who will spend it on goods and services, creating more demand. Demand creates jobs, which places even more money in the hands of even more people who will spend it on goods and services, creating even more demand, and through it, more jobs. This will help jumpstart the economy.
 
2. Create new industries: America was greatest when we had good, stable manufacturing jobs with good pay. To regain these jobs, we need to create new industries that produce American goods and services. New industries would provide temporary and permanent jobs: construction jobs, construction materials sales jobs, real estate jobs, manufacturing jobs, sales jobs, managerial positions, agricultural jobs, agricultural materials and equipments sales jobs, installation jobs, advertising jobs, and more.

The federal and state governments can provide guaranteed loans in exchange for a guarantee that all goods will be produced in facilities that will remain in the U.S. [or in the state that guaranteed the loan.] Substantial tax credits would be provided to companies that guarantee that every worker will be paid a living wage for that area, which would include enough net income to cover at least the basic cost of living in that area, plus health insurance and retirement savings. This would greatly reduce the need for entitlement and assistance programs, and therefore, the cost of these programs, without harming anyone. 

Low-interest, low-payment loan guarantees or tax credits could also be provided to citizens for the purpose of purchasing alternative energy technology. This would allow more people the opportunity to purchase and implement these technologies, creating more demand and more permanent jobs, and move America forward on the path to energy independence. For the immediate future, the surplus Social Security funds could be diverted from the federal government to credit-worthy, low-risk borrowers. These job creating industries would get their start, and the loans would still be guaranteed by the federal government--and therefore, to Social Security. 

 

A. Legalize industrial hemp. This is the version that cannot be smoked, but every portion of the hemp plant can be used to create high-quality, desirable goods, such as durable, decay-resistant rope, soft, long-lasting cloth, textiles, oils, pulp for specialty papers, construction & insulation materials, natural fuels, and even food products, as these seeds are high in essential fatty acids, like fish oil. There are so many uses for hemp that would spawn many new industries and companies, necessitating new job creation. And not just job creation, but permanent manufacturing jobs that pay well, sales jobs, managerial positions, etc. New factories also requires new construction, creating new construction jobs and demand for construction materials.

Industrial hemp is not illegal to grow in the U.S., but since 1970 has required a permit from the DEA, which is a complicated process. The federal government can jumpstart the economy by exempting industrial hemp from this permit requirement, and states can remove any legal barriers as well.

B. Alternative renewable energy technologies: America’s dependence on foreign oil has led to wasting trillions of dollars and over a million lives. Fossil fuels are finite, so what’s the point in subsidizing billions of dollars in exploration for oil companies, who are posting record profits? Speculation on oil has artificially increased oil product prices, and believe it or not, the oil companies are one of the biggest culprits--just ask the transportation industry. Why do them MORE favors? Instead, let’s focus on reducing the cost of alternative energy technologies currently available, developing, producing and implementing new alternative energy technologies, and ensuring that citizens and small businesses are able to purchase residential energy technologies, to ensure demand and therefore, job creation. 

Bioethanol from algae is one promising new energy source. Unlike bioethanol from corn, which is extremely corrosive, this biofuel can be used in our existing engines, pipelines and storage systems, it can be produced quickly and inexpensively, it takes up much less production area than biofuel from corn, and it won’t raise food staples prices.

We also need to begin to repair our aging energy transmission infrastructure by implementing proven alternative energy technologies where they will work to their best advantage. Energy independence will not be achieved with a single technology, but can certainly be achieved through a careful combination, and this will also create jobs.

 Wind: Industrial windmills--which, incidentally, I find attractive, interesting and somehow clean-looking--should be placed in areas of steady wind, on mountaintops and in areas of large lakes and oceans that are inaccessible except by boat. Smaller, residential windmills come in many varieties; some are horizontal and can operate with just a little wind.

 Solar: Solar panels should be used on rooftops in all areas except the very rainiest/cloudiest, as an important part of energy delivery to residences and businesses. They should also be used in isolated areas inappropriate for development. Panels could be supplied and serviced by energy companies, or people could purchase their own in exchange for government-guaranteed loans or ample tax credits.

Hydro: Tidal generators can be implemented in rivers; NYC has some in their East River.

 Wave generators can be placed in large lakes and oceans that are accessible only by boat [to affect as few people as possible; we don’t want to negatively affect beach/water tourism].

Geothermal: Geothermal technology should be used unobtrusively in areas with hot springs, and other areas as appropriate.

C. Repair/protect aging infrastructure: Our nation’s roads, bridges, dams, levees and utility grids need some serious attention, and any system that uses electricity or is controlled by computer is vulnerable to the very real threat of EMP or malicious hacker attacks. Diverting funds from the more-than-ample military budget for this purpose would create temporary but well-paying jobs in construction, various types of engineering, road construction, and various computer technologies. Our National Guard uses these roads and bridges during emergencies and disasters, and our armed forces would need them in the event of attacks on our own soil. To help ensure that their efforts are successful, it is vital that these systems are in good condition and protected from threats.

3. Put multi-national companies on notice: America will not continue to be overly generous with tax breaks while you outsource us into a depression. It’s time for the big stick. We need to take immediate steps to repeal any and all laws that prohibit us from taxing the products of American companies made outside the U.S. just as we would any product made outside the U.S. by a foreign nation. If America is so undesirable in terms of expense, then we need to make America and American labor MORE desirable. We cannot do this by repealing the minimum wage, or eliminating safety regulations. We are not a third world country, and we will not allow the wealthy corporations and their stockholders to turn us into one.  Instead, if they dislike their own country so much that they are willing to be a part of running it into the ground, we will tax them. And not just products. Those irritating customer service and tech support conversations with people half a world away who can barely speak intelligible English would soon come to an end, because we’re going to tax the calls the call centers receive. We’ll make it more expensive to do American business outside the U.S. than it is to do business inside.

We’ll also offer these companies a carrot: the same tax considerations and guarantees we will allow new companies. Keep/move all jobs and facilities [only the ones producing goods and services to be sold/used inside the U.S.] in/to the U.S., and pay all workers a living wage. If they don’t like it, let them move. They won’t move. But if they did, we really wouldn’t miss them, because most of them don’t pay all that much in taxes anyway, and there’s only a few administrative/clerical positions at their headquarters here.  Something is wrong when American companies pay more in income tax to foreign nations than they do to their own.

Unemployment is high; underemployment is higher. Far too many people are eligible for government assistance programs, including many who ARE working. Our citizens depend on Social Security and Medicare, because they simply cannot afford to save for retirement. It is absolutely vital that we shock the economy back to health. We know what doesn’t work: trickle-down economics and tax cuts, grandiose plans whittled away into failure by political demands, placing personal gain above the best interests of your country. Focusing on cutting spending and the deficit when we should be spending sensibly, on programs that will help rather than hurt. Shocking the economy requires patriotism. Shocking the economy requires our politicians to also shock the nation and the world, by implementing a common-sense solution that works.