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American Idle: Should the Government "Create" Jobs?

By
Mortgage and Lending with Platinum Home Mortgage Company NMLS #238304

If California were a big furry dog, its owner would have a clogged vacuum cleaner. That's because California is SHEDDING JOBS at a fast and furious pace.

What's left behind is just as worthless as a bunch of dog hair on your carpet: a big fat mess that needs to be cleaned up.

Oh if it were only as easy as plugging in the vacuum. But instead, our State Controller has warned that California is down to "PLAN D" on the checklist of paying bills.

  • Cash reserves are piddling
  • Special funds that have been borrowed from are tapped out
  • No one in the private sector will lend the state money at a reasonable rate (I wonder why?...we call this having "no assets" in the mortgage world).

Since a state cannot file bankruptcy, part of plan D is to issue IOU's. Not only to vendors and landlords and schools, but also for taxpayer refunds.

Upon hearing this, most Californians have wondered aloud, "Can we pay our taxes with an IOU?"

You wish. Not happening.

And just like a rampaging disease, everyone you talk to either is either sick, knows someone who is sick, or is afraid they will be the next to catch the highly feared "no jobitis".

Where will it end?

  • College graduates so discouraged they have stopped trying to find a job
  • Older Americans who got the axe first... because they could easily be replaced with someone younger who needed less benefits, and who would work for less money
  • The thousands out of work because their company just shut its doors. Forever.
  • Those industries that are still around, but operating on a skeleton crew after laying off most employees
  • People near retirement age who had no intention of taking retirement, but either threw in the towel, or were forced to retire early

If we believe in free market economics, we must also believe that these people will somehow eventually be re-distributed to jobs that will serve our battered economy in a better way. That will fit better in a new era of constrained spending. 

Already, enrollment at our colleges and universities is soaring.

I am wondering what those NEW jobs will be?

Just like the guy who can't figure out why his big furry dog keeps dropping gobs of hair. And how long his vacuum cleaner will last.

Do you think those jobs should be "created" by the government? Or do you think creating jobs is the REALLY the first cousin to the bailouts (handouts?) being bestowed upon the companies of America?


Written by Janet Guilbault, Mortgage Lending Expert Based Out of the San Francisco Bay Area

 

 

Anonymous
Anonymous

Marte,

 The  "no work no eat policy" was practiced out in communist countries where everyone 18 + had a job. based on qualification ... but everyone was employed . Amazing huh??

 The system was good ( to the core )  until it got corrupted .... and YES I think that gov should provide some jobs .... or least protect jobs, promote policy to create jobs or else what do we need them for ... really ? everyone needs a government or else will be anarchy... Just needs a government that works .. . So I think time to reboot.  without jobs people will turn against the goverment .... so the goverment's job's description might not say " has to create jobs " they still do.

I personally went trough a government change and it is not pretty; everything got turned upside down and re bot.  Some people had a very hard time adjusting to the new life and some suffered a great lot. I left that country to find a better one... and 18 years later looks like a familiar scene...

 

Jan 26, 2009 02:57 PM
#22
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

California has regulated itself to its current situation.  It's a crazy situation.  I almost took a job in San Jose in 1999, height of tech boom.  Then I looked at the housing markets.

Jan 26, 2009 03:41 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Well, I certainly don't want us to become communistic, but I do think we make it way too easy for people to choose not to work. Seems like a huge segment of the population believe that they're entitled to what others earn. Pride in accomplishment and personal responsibility seem to be missing in too many people.

Our mess needs to be attacked from so many different angles - government waste being one of the biggest. But then (for instance) if our government agencies no longer threw away all the office supplies on hand at the end of their fiscal year so that they wouldn't have their budgets cut for lack of "need" - what about the people who produce the new office supplies? They'd be out of luck!

So, someone in our society profits even from things we see as waste...

And that's just one for instance.

Since everything is interwoven, changing it will either have to be a gentle transition or a major upheaval. And that, as you said, will cause suffering.

Well, it already is - how many jobs were terminated today? Did I read 7,000?

One thing I know for certain. I'm glad I'm not the one who has to make a final decision on the changes to come. On the other hand, it would be fun to be part of a brainstorming group - discussing "what if" it happened this way or that way.

Jan 26, 2009 03:41 PM
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Janet ... I don't expect that our State of California will actually have any job openings soon.  Whether our US government should be in the business of creating jobs is another thing. If $850 billion in stimulus is just getting money into the economy, that's not enough and won't work. If the government invests, it should be to help creatives businesses get their mojo back, with a result that those businesses would turn around and hire folks again.  Thanks for the post. Harrison

Jan 26, 2009 05:37 PM
Anonymous
Ralph Smith

Drop the capital gains tax under 10% and watch the corporations flood to the US and invest in manufacturing that will create more jobs and real worth than any stimulus package. These massive sociaist expenditures will just expand our debt to countries like China, Saudi Arabia and other countries that would wish us harm.

Jan 26, 2009 09:43 PM
#26
Anonymous
George Stockes Coldwell Banker ELITE

Hoping the government can get us out of this is just what got us in this. Our elected folks in Congress only have one thing in mind, getting elected again. Because of this, they think in terms of what can I do to get elected again next time, which means at best they are looking 6-years ahead.

None of our current problems quietly came about. Congress, through lack of oversight, blind political ideology, regulation/deregulation, and the desire to get re-elected, simply failed to protect the American people and their interest.

Sure companies, corporations, and individuals took advantage of the situation and profited. But those on both sides of the aisle failed to perform their jobs through oversight and inaction. They betrayed those that elected them to office and the rest of the American population that has zero say in their continued re-election.

Now these same incompetent folks tell us that we need to let them spend our money and that of generations to come to get us out of this. I don't think so! A large portion of America, and that may include you and me, will suffer greatly for the ineptness of a few. We need to stop listening to what they say and read the bills they want to pass. Do you really think this will stimulate the economy?

You can refinance all the homes you want to in hopes of keeping folks in them and that will not solve the problem, it will only prolong it. In most parts of the country "the housing boom" is just the sound you heard when the bubble burst! At some point, bad loans, under financed buyers, over leveraged investors, and unrealistically high home values all crash and burn. The only thing that will end this is when the pendulum of economic reality settles back in the middle. History reminds us that in a Capitalistic society the Feds can not resolve this, they can only make it worse.

Our political leaders need to reduce domestic spending and pork barrel projects, support the American people whom they have betrayed through their poor policies and lack of oversight, and dramatically slash taxes for all individuals and businesses so that we all have money to put back into the economy as WE see fit.

Oh, and if you are not going to bail-out all businesses you should not bail out any. Congress has no right to decide which businesses fail and which survive.

Jan 27, 2009 01:03 AM
#27
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

George: I confess. I agree with you. I have been called (and it was not in a flattering way) a free market cowboy. I say: Leave good old supply and demand alone and it is an amazing thing to behold! All the resources flow to the right spot!

To those that believe the free market is "how we got in this mess", I would challenge this by saying manipulation of the mortgage industry (it was decided that even people who shouldn't buy homes would be allowed to.... thus becoming pawns) was at the root of what we call the subprime mess.

This overheated demand, causing prices to soar by creating buyers who should have never been buyers.

It is okay to have renters. It is okay for banks to impose rules as to who gets to borrow money. In fact, it is logical.

Jan 27, 2009 01:24 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Ralph S.: There is actually historical proof that this solution works. It brings in more tax dollars than the cut sacrifices. People would definately get hired and real productivity would increase. Our family has a small business. We would love to hire. But there is nothing left to spend on a worker.

Paying taxes is redistribution of wealth.

Jan 27, 2009 01:28 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Harrison: If you just dump money on a business there is no incentive to do anything with that money other than hoard it, or continue reckless spending because the money was free. Why should any bank loan more money or hire someone new?

That is why I like tax incentives for businesses like you do.

 

Marte: Whenever money is free...that is, it was not earned....there is always wasteful spending. Once the money "drops from the sky" the price of anything goes up. If insurance pays for a car repair, the estimate is way higher than if you have to pay yourself.....they always ask you this before doing the quote.

Healthcare is overpriced because the guy getting it is not the guy who directly pays.

But government is the worst, as you pointed out. Since taxpayers provide the money, they waste, and everything they buy costs way more. One pencil? $5

Jan 27, 2009 01:36 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Mike: California may be messed up, but real estate will always be expensive here because it really is a great place to live. In fact I view these prices as one of the best opportunities that will come around probably in my lifetime.

But many have fled, and don't agree.

Jan 27, 2009 01:38 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

To the anonymous commentor: Your perspective in coming from a different country is appreciated. Maybe we are already in a re-boot situation. It appears that way to me, anyway.

The role of the government should not be to be in business. If we need roads and bridges, then let private companies build them. If we need more jobs, make a scenario where they can hire more people.

Every gov't worker is not producing anything at all. They are spending money that others produced. To enhance productivity, there should be less government.

Jan 27, 2009 01:44 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Michelle:

Our aspirations collectively as a nation have not been in sync with the reality of our grasp.

I could not agree more, and think this is a well written summary of what we are discussing.

If our own government is not concerned with operating on a balanced budget, then why should its citizens? Leaders always have an impact on followers.

There is a core problem as you described it with the American attitude.

Jan 27, 2009 01:47 AM
Anonymous
Chuck in TX

Yes, California is a nice place.  So is Oregon, Texas, South Carolina, Kentucky, Colorado, New Hampshire, Missouri, New Mexico, Florida and Wisconsin.  My point?  I think that the mentality that somehow CA is more special is partially what led to the mess your state is in.  The state's budget was developed on artificially inflated property values generating artificially higher tax revenues.  Californians were telling themselves that the good times would last forever and values would do nothing but go up 25% per year, every year.  And that you could have it all. 

But values do not go up indefinitely.  The reality is that true value is probably closer to where you are presently.  Maybe even somewhat lower.  The past decade was a distortion, everyone lost their heads, and now here is the mess to clean up.  Unfortunately the California mess has hurt many people outside the state, even globally.  I am sorry if I sound harsh, but the California POV seems somewhat narcissistic to a non-Californian.

And as for Gov't "make-work" programs?  I am skeptical as well, but you will need people who are actually working to originate loans for in the future.  Cutting taxes further sounds well & good, until you realize that taxes have already been cut substantially this decade, and we are in a heckuva mess left by the prior administration.  Somehow China will need to be paid off.  Something tells me they aren't very nice if you welsh on their money.

Jan 27, 2009 04:15 AM
#34
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

A great Cal Thomas column this morning. Excerpt:

"Generally, one jump-starts a car when th battery is dead, but America's "batteries" (its people) are not dead. The vehicle has stalled because too much government meddling and loss of personal responsibility has flooded the engine. More meddling will not revive the U.S. economy any more than holding down the accelerator on a flooded engine will start a car."

The article went on to suggest that only providing incentives to businesses and families to reinvest in the economy will help.

Cal Thomas is a columnist for Tribune Media Services - today's column was in the Spokesman-Review. If you can find it, the whole thing is worth a read.

I love all the insightful comments on this thread - Thanks, Janet, for starting this discussion!

 

Jan 27, 2009 05:16 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Chuck: Yeah, I think the ugly Californian is alive and well. You can always tell who he is when he goes into a restaurant, looks at his iceberg lettuce salad (topped with one squishy pink tomato slice) and turns up his nose. Okay, let's face it, Chuck, we DO have better salads! LOL

Or when he drives into town and buys the most expensive house there because he has left California after selling his house for buckets of cash (that may not be happening any more!)

Or when he thinks anyone who talks with a Southern drawl is stupid. (and they dare to accuse Southerners of predjudice!)

I could go on, but before I do, you should know I am a hybrid of a Southern Belle and a California Girl. I see both sides, and agree that Californians can cop an attitude of superiority at the drop of a hat.

What can I say? I am stupid in love with crashing waves, vineyards, foggy mornings, snow capped mountains, and (did I mention this before?) salads with field greens, nuts, fruits, and oh, yeah, avacado slices.

 

Jan 27, 2009 05:50 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Marte:

Thanks for the tip. I love great analogies!

Jan 27, 2009 05:52 AM
John Lavin
Re/Max Ultimate Realty Inc. Brokerage - Toronto, ON
Realtor - Mississauga - Toronto Real Estate

Lenin must be rolling over in his grave with laughter!

I'm up in socialist heaven - Toronto, Canada where our so called Conservative Federal government  is about to go down the same road as every other western government of late with a new budget this afternoon aimed at stimulus and job creation.

The problem is we keep letting them do this do this to us.

Envy is an unfortunate human disorder that we all suffer from. Politicians and bureaucrats are very skillful at manipulating this emotion. They tell us that because someone else has something that we do not we are entitled to the same and the government is going to provide it. What they don't tell us is that they will be skimming off the top to pay their own salaries, expense accounts and let's not forget about the gold plated pension plan. 

We have a tunnel in this city that was supposed to be another arm of our subway system that was started in the recession of the 90's under a government jobs incentive program. It now sits in mothballs because projected ridership levels did not make it viable. A complete waste of money. Did it create jobs? Yes for a bunch of unionized workers whose leadership turned around and donated funds to politicians election campaigns.

The only certainties to evolve from todays government "stimulus" will be inflation and economic slavery for future taxpayers some of whom will not be old enough, or perhaps not yet born to have had a say in this fraudulent behaviour. I'm British, this is the way we spell it....ok

What's the one of best hedges against inflation?  You guessed it  - REAL ESTATE

For anyone interested pick up a copy of "Animal Farm" by George Orwell. Still as accurate and relevant as it was when it was written.

01/27/2009 3.10pm by John Lavin  www.johnlavin.ca

Jan 27, 2009 06:15 AM
Chris Olsen
Olsen Ziegler Realty - Cleveland, OH
Broker Owner Cleveland Ohio Real Estate

While many benchmarks of today are not nearly as bad as during the Great Depressiosn, there are many different factors in play today that also didn't exist back then: new/larger entitlement programs, massive national secuity expenses and needs, a global economy where unskilled/low-skilled workers will primarily be in developing countries, a global economy whereby even skilled and educated workers can sometimes be outsourced, a health care burden for older americans that is ever increasing due primarily to advanced in technology, tax redistribution policies that penalize cities and inner-ring suburbs and the ramifications of that, and if implications of global warming ultimately have a serious consequence (the economic impact over the next 50-200 years will be incalculable) and the list goes on.

I think we are at a crossroads with so many major issues to face simultaneous that part Obama's speech that talked about shared sacrifice and responsbility will be nothing like our country has ever seen moving forward.

I'm not all doom and gloom, but I do think that until a better model (politically and economically) is developed, there are so many competing interests out there (lobbyists, class, and the list goes on) that to confront those challenges they way they should be will be very, very hard to do, and I think it's easier for everyone to wish that they either go away or nibble around the edges.

Heck, you had John McCain saying as late as 3 months ago that the "fundamentals of the economy were strong."  If this mentality is the kind of leadership in "some" of our elected officials, it makes me scratch our heads that this statement, as well as others who should have seen this train wreck coming from a long distance, cannot solve this problem.  The fact that the first 350b was mostly a waste of money (in my opinion) as it was little/no accountability, then what does that make for the larger issues?

I do think Obama will do an 800x better job than the last eight years, which was an unmitigated disaster of our fixed/limited resources that were blown and unrecovered during a time of unprecedented change.

All that said, I myself (as well as others who live in this fabulous country) have in the past, and will in the future, seek a way to re-invent itself for the betterment of the next generation, and I think that will happen, it just probably won't happen in the timeframe or manner in which past generations have.

To answer your last questions:  I dont' think there is a better alternative presented at this time to try and stop/slow the rapidly increasing downard spiral.  If someone has a suggestion, I would love to hear it, as the top minds in this country of all political (and economic) stripes, don't have any better ideas.

I think to leave the market to it's own devices will only benefit those with serious capital and resources to survivie and invest.

Jan 28, 2009 01:02 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Chris: I can't help it. I am a fan of yours already. You write beautifully.

Your theme of being at a crossroads is inspiring....only because whenever there is a crossroads, innovation and creativity come into play. We Americans have proven that this is our greatest strength.

Perhaps forums like this will be a part of what will hopefully be great changes.

Personally, I would like to get rid of the word "stimulous". That is because the implication is something artificial has intervened in the system.

I would much rather think that we could come out of this by collectively achieving a new sense of dedication and work ethic that is the foundation of our Country. That the formula for success would fall on the side of a renewed resolve, optimism, and faith.

Jan 28, 2009 01:33 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Yes, creating jobs by creating more government jobs is first cousin to the bail outs.

I think it's also first cousin to welfare, because even though the government workers do pay taxes, it takes a lot more private sector workers to pay the taxes to pay their salaries.

What's the least taxes someone can pay? 15% maybe? Then it takes about 6 or 7 other people earning similar wages to hire one government worker.

Sep 30, 2009 05:26 AM