Now that the election cycle is in full swing, we have yet another reason for the government to avoid accomplishing anything. Blurred into this arena is the need for jobs creation and getting the economy moving again.

The Kazillion Dollar Jobs Bill

President Obama has proposed a very large jobs bill and the Republicans, on cue, have taken the position to block everything without finding another solution. When I look at these types of debates my head swims before I can ever figure out what is really in the proposal. And I cynically know that whatever it says is not what the special interests will make it actually do.

There was one proposal that caught my ear and I really like the concept.

Pay Employers to Hire

The idea is to pay employers $4000 for each employee they hire for a minimum of one year. There was also a clause in there about emphasizing the long-term unemployed which would be those on unemployment for over 6 months.

Basic Math and Motivation

A criticism of the current administration is that employers are afraid to hire based upon uncertainty. A second criticism is that employers won't hire because of costs from the new health care plan. The average employer cost on health insurance is about $200 per month so this proposal can offset the health care costs for almost two years.

My hope is that many employers need to hire and would like to hire and this might be just enough to make them feel they can hire.

The Real Bonus

Here is what really interests me about this proposal. The average unemployment payment is about $1200 per month or $14,400 per year. If nothing else happens except these employees stay with the company for a year, the government would save $10,000 per hire.

But I don't think it stops there. I would bet that the government probably doubles that cost in their overhead to manage that person on unemployment. So let's call it a $25,000 savings in the first year. Let's say it stimulates a half million jobs. That is a $12.5 billion savings. The numbers become significant quickly.

The Ultimate Affect

The money is nice but the beginning of a virtuous circle is even more important. Employed people are more positive than unemployed. They spend more money and are generally more productive in every aspect.

Higher employment and lower unemployment create more demand which justifies the need for more production and employment.

This proposal makes math sense and economic sense. It is a great starter to break the impasse and begin a better cycle.