Human Resources: New Stimulus 2.0 Plan Creates 6.2 Million Jobs for Unemployed in Six Months

Washington, DC (PRWEB) February 3, 2010 -- As debate intensifies between infrastructure spending and tax cuts to stimulate job growth, Small-Business-Stimulus.org announced an alternative that will outperform either option in job creation, economic stimulus and deficit reduction. The new plan, Small Business Stimulus 2.0, will create 6.2 million jobs within six months strictly for unemployed workers at an average cost of $32,000 per job. The new plan will drop unemployment numbers from 15.3 million to 9.1 million and the unemployment rate will decrease from 10% to 5.9%. Within one year 78% of the costs will be recovered by existing taxes and unemployment benefit savings. Subsequent periods will yield a net surplus and reduce the deficit.

Since the mid-1990s, small businesses have created 60 to 80 percent of the net new jobs, according to the Small Business Administration. Creative and ambitious entrepreneurs are what's going to turn our economy around. The Small Business Stimulus 2.0 plan will incent small businesses to hire unemployed workers.

The $787 billion Recovery Act had a goal of creating or saving 3.5 million jobs over two years which calculates to over $224,000 per job. It has fallen short, the economy continues to flounder, unemployment is at 10% and shows little sign of significant job growth. A new, more effective stimulus is needed.

Others are calling for tax cuts to stimulate job growth. But tax cuts do not guarantee job growth and would guarantee an increase in the deficit. Tax cuts appeal only to profitable businesses while a marginally profitable business does not have the cash flow to grow and hire new workers. A tax cut benefit would be used mostly by profitable companies that would be growing and hiring without a tax cut incentive. It does not help and incent struggling small businesses to hire more workers.

Small Business Stimulus 2.0 calls for $200 billion from the $787 billion Recovery Act to reimburse small businesses up to 80% of wages for hiring an unemployed worker for one year. Employers would have a six month window to hire unemployed workers under the plan. The plan would generate $250 billion in new employment wages subject to payroll and income taxes already in place. These taxes would return $92.6 billion (46% of the plan cost) to the federal government within one year. Additionally, states would save $47.5 billion in unemployment benefits and collect $16.8 billion in income and sales taxes. A total of $157 billion (78% of the cost) would be recovered by federal and state coffers within one year. The economic surge caused by Stimulus 2.0 would eventually generate a net surplus resulting in reduction of the federal deficit. Since funding would come from the $787 billion Recovery Act, there would be no new spending or increase in deficit.

A key part of the plan also calls for a big change in the way the legislation would be developed. It calls for entrepreneurs and concerned citizens to write the bulk of the bill rather than Congress or their staffers who have little or no business experience. Business owners know what will work and what things to avoid that would kill effectiveness of the plan. They also know how the system could be gamed and would write rules to minimize fraud and abuse.

More details of the plan including a financial model can be seen at http://Small-Business-Stimulus.org
Follow on Twitter: http://twitter.com/Stimulus2

Small-Business-Stimulus.org is a small group of people recently formed only to support Small Business Stimulus 2.0. They have no ties to political, business or other organizations of any kind. Their mission is simply stated "To create jobs for 6.2 million unemployed Americans and transform the economy from bust to boom in six months with eventual return of all costs to the government." The organization members have chosen to remain anonymous. The group can be reached through its PR Director via http://Small-Business-Stimulus.org