Loadingdata | Daniel Bos

I have already posted this on Google+, where I’m mostly active these days, but thought it deserved a sep­a­rate blog post: Obama’s job cre­ation scam.

Pres­i­dent Barack Obama plans to send the text of his $447 bil­lion job-growth pack­age to Con­gress tonight and urge quick action on the leg­is­la­tion, accord­ing to an admin­is­tra­tion offi­cial.

I’m quot­ing from a Bloomberg arti­cle about Obama’s plan to spend 447 bil­lion on job cre­ation.

Job growth stalled last month and the unem­ploy­ment rate has hov­ered at or above 9 per­cent for more than two years. The president’s job-approval rat­ings are falling to new lows as pub­lic doubts about his stew­ard­ship of the econ­omy rise. Pub­lic opin­ion of Con­gress has dropped even lower.

A sim­ple cal­cu­la­tion: The labor force of the United States is about 150 mil­lion strong. Accord­ing to the arti­cle, the unem­ploy­ment rate is about 9% (the actual amount is of course much higher, but that’s a dif­fer­ent story altogether…)

So “offi­cially” there are about 14 mil­lion peo­ple unem­ployed. If all these peo­ple are pro­vided with a job, each one of them will be respon­si­ble for 447 bil­lion / 14 mil­lion = $32,000 of costs.

I expect most of these to be low income jobs. The min­i­mum wages in the US are $15,000 per year. Addi­tion­ally, the income tax is one of the low­est in the world. Another cal­cu­la­tion (source: Wikipedia):

15,000 Income
–5,800 Stan­dard deduc­tion
–3.700 Per­sonal exemp­tion
—————————————
5,500 Tax­able income

This falls under the low­est tax rate of 10%.

Ergo, per year a whop­ping $550 of taxes will be payed. If we take the costs per per­son and divide it by the tax income, this results in 58 years of pay­ing taxes before the costs are repaid. (That is exclud­ing inter­ests, 1% per year brings it to 89 years, 1.5% inter­est brings it to 140 years and any­thing about 1.7% inter­est is a lost cause, the inter­est will be higher than the repaid taxes)

I there­fore sus­pect this has more to do with the tax cuts for the big cor­po­ra­tions who are sup­posed to cre­ate those jobs, and less with the actual cre­ation of jobs!

But than again, this doesn’t really comes as a sur­prise… Any­one who has paid the least bit of atten­tion must have noticed by now that the United States are a plu­toc­racy!

Posted from Bei­jing, Bei­jing, China.