Wednesday, December 16, 2009

Raising money in 2009: My plan for cutting unemployment in half in 30 days

DISCLAIMER--please note I am a registered Independent. My point of view comes from being a small business owner--not the left or the right.

If you are angry at the way things are being handled by Washington--please read this over and sound off below.

President Obama's dispersal of stimulus funds has been a total joke so far. If you look at the actual jobs created, the expense of the program has been monstrous:

American Prospect associate editor Ezra Klein wrote in November 2008 "The stimulus package cannot be understood as spending divided by jobs...The envisioned stimulus is much bigger than simple job creation. It's infrastructure construction and aid to states and the preservation of the safety net..."

Please--tell that to someone out of work who is about to lose their "safety net."

The dispersal of federal funds by the feds and the banks should end. Immediately. The banks aren't loaning to small businesses and the feds waste the money. Give it to small businesses instead with the requirement that the funds are used to hire the unemployed.

In November, the "official" unemployment numbers was 15.4 million people and the rate was 10%. Small business owners could right this ship overnight by implementing the following program:

1. Provide direct employment loans to small businesses who promise to hire 1-2 currently unemployed personnel
2. Defer repayment of this loan to 2011.
3. Cap the interest at 5%

If you hired 7,500,000 million people this way at $45,000 per year, the unemployment rate would go to 5%. The cost of this would be $337,500,000,000. I don't know what the default rate would be, but if you assumed 85% of businesses repaid the loan with 5% interest, the real federal cost would be $36,281,250,000. This is significantly lower than the untold hundreds of billions that are being wasted by Washington right now.

If you had a 95% repayment rate, there would be no net cost to the government and this would not require a cent in tax hikes.

As a small business owner, I can tell you right now I would hire three people overnight if this program was available. I already know who they are--the job offers would go out before the ink was dry on the loan paperwork.

But I'm not a politician, so what do I know...

Torrey Loomis
President & CEO - Silverado Systems, Inc.
(916) 760-0032 • FAX (916) 404-5258


McGee said...

That makes way too much sense and logic. Something which those miscreants in Washington have a severe lack of.

David Kirlew said...

Yeah everyday I wonder about Washington and their sense or lack there of. There's a lot of over things I have discussed with friends that would be more beneficial than just banks hoarding money for a safety net of their own. I'm through looking to SBA to help in time of potential need. I'm looking for a solution of my own.