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Old January 30th 09, 01:21 PM posted to
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Default US po boy stimulus plan

A stimulus government plan with no pork?

I am floating this idea out there and would like it please spread the

Let the government pay the bottom 40 million hourly wage earners $2 an
hour raise, it would put up to an extra thousand dollars of month for
each family into the economy. Waive the employer matching fund part
(taxes, insurance, etc.), the employer would not pay the raise, the
stimulous package would, and this temporary measure might boost the
economy? You would have to restrict borrowing on this income, any
person participating in the prorgram could not use the extra income
for credit purposes (that's what got us into this mess).

I estimate this would cost approximately 167 billion dollars, and if
70 percent of the economy is based on consumer goods, if this did not
do it, I would be surprised. Do you realize the $350 billion dollars
already spent (but they refuse to say how) would allow us to pay the
bottom 40 million hourly wage earners $4 an hour for an ENTIRE YEAR?
I would shoot for a two year program, after this time, employers
should be in the position to either up the ante or prepare to fight
for new employees as people would be in the position to switch jobs

No one could argue that this would be pork barrel spending either. The
increased economic activity would boost those who depend on
performance or commisions.

Stop allowing people to hire based on credit reports would help as
well (people with bad ones may give up looking, and they are the ones
that need the jobs to pay back others. If these Congressional
represenatives are bound and determined to "stimulate" the economy,
then I believe this is the only plan that is not full of pork, and no
one can claim the credit for it, it is a real common sense financial

Actually part of the plan should pay for it self (if not all of it).
If 40 million two earner families started spending an extra $800 a
month, that should crank up the job market. More taxes would paid, I
don't get paid enough money to sit here and draw up estimated
earnings, pie charts, and market evaluations. We have people making
$500 a day that are supposed to be doing that. Employers don't want to
give raises, and if we are going to borrow and print money, we might
as well do it right. The money would be spent now (not in the year
2010) and it requires no new government jobs on the current scale

No, you couldn't pay everyone $100 an hour and make it work. There is
a ratio involved, and their is a return rate for every dollar spent.
I'm not paid to explain this, although I'm sure some bored professor
can explain how a dollar goes through the system and is recycled
economically. Every dollar spent at one level turns into 10 dollars
down the line (depending on how many days you want to spend explaining
this, and how many white boards you want to use, or expensive wide
screen projectors that most of these giddy professors will get to play
with under the new "Obamaland initiative", or the 2009 budge plan, a
little humor there).

There is a ratio involved with this plan. What this effectively does
is raise the minimum wage by $2 immediately (and motivating people to
take jobs they would not otherwise). If the average hourly wage of the
bottom 40 million wage earners is $8 an hour, than that $2 is not more
than 20% of the real wage involved. The more the person makes, the
less this effective ratio becomes.

It would be nice to demonstrate that if employers would give employees
raises, instead of laying them off, people spending more money would
mean that more money can be made. If the increased price of labor is
delayed, then we skip the inflation rate for one cycle and hopefully
jolt the economy out of this irregular "heartbeat" rhythm.

I think this plan is better than a welfare plan that hands out checks,
it requires people to do something other than fill out a government
form, and it still involves the marketplace because employers have to
compete with other businesses.

If the ratio is 20% or less, and the effective recapture tax rate is
say, 13% (gas taxes, and others, etc.) then your outlay is only 7% or
approximately 60 billion dollars or so (my spreadsheet program is not
on this computer).

You probably have to do this for two years because there is probably
14 months of merchandize sitting on the docks waiting to be

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