Tuesday, March 01, 2011

Just 18 cents per American per day employes 200,000

Last night on channel ABC World News Tonight, Diane Sawyer, had a piece on buying American. The cost to employ 200,000 workers is just 18 cents per day per American. The hype is that this is just a small price to pay. The question I have is, who says it is such a small price to pay?

There are 330 million Americans in the US per the last census. There are 365 days in a year. Pretty simple math to take 330 x 365 x 0.18 right? The answer is $21,681,000,000 or $21.681 Billion. If we divide this by the 200,000 that would be employed, we find the cost to employ one person is $108,405. This is a lot more than I make in a year.

There are seven in my family and the cost to my family would be $459.90. Now I am a pretty frugal person. $459 would pay the public school tuition for my minor children. It would also be enough to pay the cost of the used college text books for a year. It would also allow my family the luxury of buying pizza about twice a month. It would also allow me to save $459 more in a given year to help secure my retirement.

The problem is employing 200,000 out of the more than 14 million unemployed really does very little. If the goal is to employ all, then we need to spend $1.52 trillion more in a year or for my family of seven would be $32,193 a year. Sorry, this is not possible for me or for that matter very many American Families.

What is the answer to our unemployment problem? First we have inefficient tax laws. It rewards spenders and punishes savings. The fair tax law is not the answer, but an elimination of all exemptions and credits is. What you do with your money is up to you. The market place is the responsible entity for rewarding creativity, invention and efficiency. If solar power is better than burning coal then coal will go the age of dinosaurs. If wind power is cheaper than nuclear, then nuclear plants will not be built. If electric cars are truly the future than gas powered cars will slowly go away.

What we need is the best products making it to the market based on their merits, not some government mandate, tax credit or incentive. We should not be subsidizing workers by simply buying American. This means our products are more expensive and not competitive abroad. We need to be competitive with all other countries. The day of high standard of living is gone due to government spending and continual annual deficits since 1958. We need to spend less, save more and be the capital market of the world.

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