Another waste of taxpayer funds by people who don’t understand business

Government employees who have little, if any, business experience are bound to come up with wasteful ideas.  Here’s another one:

Via Obama Announces $33 Billion Hiring Tax Credit for Jobs – ABC News.

Under the president’s proposed tax credit, businesses would receive a $5,000 tax credit for every net new employee that they employ in 2010. The total amount of credit will be capped at $500,000 per firm to ensure that the majority of the benefit goes to small businesses.

This is simple: While a few companies might hire employees they otherwise wouldn’t have due to these incentives, the vast majority of businesses fall into one of two categories:

  1. Business that don’t have demand for their goods and services and don’t need to hire.  Even with a $5,000 incentive, hiring new employees means they’ll be paying more for wages than necessary.   They won’t use this program.
  2. Businesses that were going to hire anyway.  They had demand for goods and services but didn’t need the additional incentives.  Sure, they’ll cash the checks, but what’s the point?

Leave the $$ with the taxpayers and let them spend it how they like.  That will stimulate demand and lead to real hiring.  Don’t give it to an inefficient government that will take its cut then waste the rest by giving it to companies that were going to hire people anyway.

0 thoughts on “Another waste of taxpayer funds by people who don’t understand business”

  1. It is about creating the appearance of doing something. If this was part of a previously announced plan at the start of summer to kick start jobs, I would not be so cynical. But this is a reactive measure thrown together at the last minute because the “Summer of Recovery” did not happen. The PLANNED policies failed to produce jobs. Now, they expect something thrown together as a last minute response designed to help protect jobs (for Democrats running in 2010) to really help? Let’s see, the long term planning for plan “A” didn’t work but plan “B” thrown together at the last minute is just what we need and is sure to be successful. If only it was their good money they are throwing away instead of ours. If they are so sure it will help, how about a planned 10% pay cut for all government workers if Plan “B” doesn’t produce results? Put public sector job salaries at risk of this doesn’t produce the expected results. Show your confidence Mr. President!

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  2. You were right on when you said the ideas are a result of a group with little to no successful business experience (paraphrase)…. or even business education. The vast majority of the elected decision makers are lawyers, or professional politicians. They majored in things like history, political science, communications. There is nothing wrong with those fields of study, but they do little to prepare you to make business decisions. They are very good at prescribing quick fixes, or “bandaids”, but do not have the skill set to look down the road at the longterm effects these decisions may have on businesses and taxpayers.

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  3. The vast majority of the elected decision makers are lawyers, or professional politicians.

    There’s two types of lawyers: the vast majority, who went straight from their English degrees to law school to a law firm (or so-called civil rights work) and have zero idea that they are an overhead cost to business (as opposed to money-makers), let alone how businesses run. Then there’s others who have a clue, and are usually found working as in-house counsel or in smaller firms. The latter usually don’t have any desire to run for public office.

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