Much of the stimulus is directed to public works that at best create only temporary jobs or more bureaucracy that produces no income, goods nor marketable services. Many of these "created" jobs will require more tax revenues to sustain. This is where taxes are eaten up.
An outrageous percentage of the bailout funds targeted for financial and auto sectors was spent to shore up fat pension funds and salaries. Approximately 1/2 of the private sector jobs are provided by small firms (less than 500 employees) with the other half by larger corporations. This is where new jobs, marketable goods and services are created, where taxes are generated to support the public job sector.
The stimulus has resulted in the expansion of the public sector (increased employment and pay) and the private sector has shrunk (higher unemployment, fewer jobs). Every new reform being initiated in Washington is adding additional cost and tax burdens on the private sector while it expands the public workforce (all job killers to the private sector).
To avoid the deficit accounting Washington is ignoring the stimulus spending by placing it "off budget" as they have with Social Security, Medicare and other entitlements they cannot pay for. Little to no attention has been given to the small employer to stimulate job growth from the bottom up. But, much is being done to discourage it while the government loads up at the top down, a reverse version of trickle-down economics.
Now, unemployment benefits from insurance paid are being morphed into entitlements paid out, while ignoring the source of new jobs to employ the unemployed.
The revitalization of the housing market depends on a healthy private employment sector. This is where households are created and income is generated to qualify for mortgages. This is the soil that needs to be revitalized and nourished, not neglected, over regulated and starved of nutrition. The housing market is tied to the jobs market.
Michael Caruso, Broker ABR ABRM CRB CRS GREEN GRI
2007 President, Orange County Association of Realtors (949) 753-7900