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The Cost Of Obama's Stimulus Plan: $312,500 Per Job (Vote) Created Or Saved
ZeroHedge ^ | 09/12/11 | Tyler Durden

Posted on 09/12/2011 6:09:58 PM PDT by RobertClark

For those eager to put some math to the rhetoric coming from the White House over the president's jobs creation plan, and that should be everyone, here is a quick and dirty estimate based on the numbers being thrown around of a 2% GDP increase in year 1 and 1.9 million jobs created or saved... most saved, as in those you can't really quantify. Said otherwise, roughly a $300 billion increase in GDP yields 1.9 million jobs. So far so good. Now since the president is proposing to pay for the program over 10 years, let's assume the $475 billion in direct expenses is financed for 10 years at 2.5% which adds roughly $120 billion to the total cost of the program. In other words, as the calculations detailed and show below elaborate, the overall AJA plan will cost $250,000 per job created (excluding the interest expense) and $312,500 per union job, er job created (including interest). And that's how much it costs for Obama to purchase one vote... created or saved. Keynesian efficiency strikes like a Swiss watch yet again.

As for the just as troubling question of who ends up footing the bill of this "fully paid" for stimulus act, here are the details.

Earlier today, the OMB director Jack Lew gave some so far largely missing information when he laid out how the president plans on paying for the Stimulus Act Link Here. Specifically, Obama and his advisors believe they are "over achieving" by raising more ($467 bn) over 10yrs to pay for the jobs package now.

So on an annual basis, tax increases will be as follows: (86% limit of itemized deductions, 4% hedge fund managers, 8.6% oil & gas, 0.6% Corp Jets)

Per Year (Beg Jan 2013)

1) Itemized Deductions (ie $250k or higher income) $40.0 bn

2) Hedge Fund managers $ 1.8 bn

3) Oil & Gas Industry $ 4.0 bn

4) Corp Jet Depreciation $ 300 mm

The answer: THE JOBS BILL WILL BE PAID FOR EXCLUSIVELY BY TAX INCREASES (NO SPENDING CUTS)

(1) Limit on Itemized Deductions for those making above $200k & Families above $250 k ==> will raise $400 bn over 10yrs ($40 bn/yr) (because you know anyone making over $200k is very wealthy)

(2) Taxing Carried Interest as Ordinary Income ==> will raise $18 bn over 10yrs ($1.8 bn / yr)

(3) Removing Oil & Gas Industry tax breaks ==> $40 bn over 10yrs ($4 bn / yr)

(4) Removing the favorable depreciation for Corp Jets (currently 5 yr depreciation) so it is the same as Commercial Jets (7yr depreciation) ==> $3 bn over 10yrs ($300 mm per yr)

So, Keynesian effiency aside where the IRR on any new job creation is so negative our excel #Refs out, our far more important question is... how does anyone think this proposal has any hope of passage in a Republican controlled House?



TOPICS:
KEYWORDS: deficit; federalspending; obama; stimulus
Is there any doubt that this will not save or create a single job and will actually lead to a higher deficit through decreased tax receipts in the long run? This guy is way out of his league and over his head, it almost defies logic.

An immediate expense followed by 10 YEARS of spending cuts as payment. Can I post date a check for 10 years - please?!?!?!?!

1 posted on 09/12/2011 6:10:07 PM PDT by RobertClark
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To: RobertClark; neverdem; SunkenCiv; SmithL; Nachum

Hmmmn.

“Taxing carried interest as income”?

And it it used to be that interest was actually tax deductible!


2 posted on 09/12/2011 6:25:04 PM PDT by Robert A. Cook, PE (I can only donate monthly, but socialists' ABBCNNBCBS continue to lie every day!)
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To: RobertClark

For perspective, the cost of the Obama “jobs” bill is equal to 10 percent of total US government 2011 receipts, and is also equal to 1/3 of US government 2011 income tax receipts.

Even a seventh grader knows you cannot spend 133% of your allowance and expect to be better off.


3 posted on 09/12/2011 6:29:10 PM PDT by FlyingEagle
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To: RobertClark

Another stim-u-less plan.

What could go wrong?


4 posted on 09/12/2011 6:29:39 PM PDT by Nachum (The complete Obama list at www.nachumlist.com)
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To: RobertClark

I wonder what would happen to the economy if the IRS sent everyone who has a valid SS# a check for $200,000 instead of all that stimulus stuff Obamalamadingdong wants?


5 posted on 09/12/2011 6:39:10 PM PDT by SkyDancer (I Am The Person Whom I've Been Waiting For.)
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To: Robert A. Cook, PE
“Taxing carried interest as income”?

And it it used to be that interest was actually tax deductible!

I can see a lot of fund managers roiling at this proposal. Unfortunately, anymore, most gains are short term and it wont have a significant impact. Regardless of what the boy wonder's economic freak squad is telling him.

6 posted on 09/12/2011 6:41:33 PM PDT by RobertClark (People sleep peaceably in their beds at night b'cse good men are rdy to do violence on their behalf)
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To: Robert A. Cook, PE

Sadly, there won’t be any jobs created by Zero Jobs Bill II. Thanks Robert A. Cook, PE.


7 posted on 09/13/2011 4:00:44 AM PDT by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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