While vital job creation takes a back seat, the federal government blindly gives away billions returning only peanuts to the taxpayers - even then the peanuts come with strings attached.
As part of the woefully mismanaged Recovery and Reinvestment Act, the federal government is offering help to needy families in San Benito County with $1.7 million. That's only $28 a resident, but to get it we pony up 20 percent on our own! It's almost nothing compared to what we spent to bail out the nation's big losers. Directly or indirectly, the automakers received more than $100 billion. The amount poured into the finance and insurance industries and government mortgage entities dwarfs that. AIG alone received more than $101 billion and less than half stayed in the U.S.; almost $58 billion of AIG money went to foreign banks. Per a BBC economic report, the total bailout is costing every U.S. citizen $10,000.
Thus far, government has been adamant about staying out of the automobile or re-insurance business; except for bonuses, they have kept their hands off the recipients. However, that's not true for aid money; in that case, it's been strictly hands-on. The program includes 11 different categories of aid from food baskets to car repairs to back-to-school supplies. Does anyone believe we can predict how many families will need car repairs versus how many need food baskets? If that's not arrogance, I don't know what is, but if you want the money you have to design that type of program; beggars can't be choosers.
The aid program is defined as both "non-recurring" and "short-term" which raises the obvious question - what then? Let me predict the future - a similar program will follow this one. How many non-recurring short-term programs does it take to make a recurring long-term program? A separate CALWORKS program is offering only 70 jobs at nine dollars an hour and some of those will likely be in the public sector. In other words, we are spending twice as much on aid than on jobs and we are growing the government without making it efficient. There are many better choices.
What the government should be doing is obvious; they should be creating private sector jobs by promoting business and commerce and reducing the huge overhead the goes with public sector jobs. Those changes would prime the economic engine that can defeat poverty and provide sustainable growth.
The first step is to give the aid money to the county with no strings attached. The supervisors are directly answerable to their constituents and they are closest to local problems. Let them manage the aid and make flexible decisions as the community's needs change.
The second is to provide direct incentives to successful private businesses to hire and retain workers. Paychecks generate paychecks. One way to do this is to temporarily reduce the employer's contribution to social security and Medicare. After all, those who are unemployed are contributing absolutely nothing to these two funds.
The third thing is to put in place plans to reduce the huge 40 percent overhead that goes with public employment. An immediate move to a severe two-tier pay and benefits system for new public employees would change the equation dramatically. Over time it would reduce public debt and provide more services at lower cost. This frees up capital for the private sector where the value added pays for everything in the end.
You don't kill the goose that lays the golden eggs - you feed it.
Marty Richman can be reached at cwo4mgr@yahoo.com.
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