President Obama, Davos, here is an economy stimulus.

I have been thinking over this one economic stimulant package that just might prove right for turning around the economy.
Mr President, delegates at Davos, please read the following:

Here is a bailout plan for job losses that reinstates jobs in existing companies, not the new jobs the US President wants to create with new sources of energy, more infrastructure, etc:

The government should list those existing companies critical to the economy and which have cut jobs in the past one year.

Get information from these companies on the number of job cuts in the past one year,
and the related costs saved in salaries, and direct/indirect costs related to manufacturing, overheads, other costs that the company would have incurred at levels before the job cuts.
Figures of sales, profits before tax and profits after tax could be useful.

Here is a sample:
Company : Giant Steels

Job cuts in the past year: 10,000
Critical jobs necessary
to reach previous years' levels of manufacturing, sales, marketing : 8500 jobs.

Current salary bill of 8500 jobs if
reinstated : US $ 170,000,000 (8500 jobs by $20,000 average pay per person)
Total of other expenses to run company
at previous year levels: US $ 425,000,000(at salary bill of $170 million-being 40% of total exps.)
margin for contingencies US$ 25,000,000
Total bail out funds needed US$620,000,000
for this one company.

The government or it's accredited bank or financial agent should advance $ 620,000,000 to
Giant Steels on the provision that all 8500 employees are taken back.

The sum advanced is on a low interest of say 3.50% after an interest free period of 6 months.

Repayment of loans can start after a 24 months free no repayments period.
The company must ensure it reaches optimum levels of production within 3 months of the advance made.

If this is practical, the employees should give an assurance their income would be spent on all necessities and critical products, and no expenditures that could be considered excessive-extravagant-profligate-lavish...........say a two year moratorium on travel costs in excess of 10% of salary. Perhaps some tax benefits can be claimed as incentive, for spending within specified guidelines/perimeters, for one year.

Tax cuts for purchases of critical items, cars, TV sets, refrigerator, house, and other products selected by the government, the cuts, one time tax cut again for a one year period.

Let's assume this would reinstate 2 million jobs, this works to 2 million jobs with an average annual salaries bill of: 2,000,000 jobs by $ 25,000= $ 50,000,000,000 ($50 billion) available in the economy for people to spend, (wisely!) and a good sum it is.

2 million jobs at the rate of an average of 20000 jobs per company means the government is covering some 100 critically important companies in a bailout package, for reviving the economy.

If these 100 companies need an average of 20,000 employees per company, i.e. 2 million employees@ $25000 =
$ 50,000,000,000 as the total salary bill
+ total costs of $ 1,70,000,000,000 over 100 companies =$1, 70,000,000,000
($50 billion as 30% of total costs, the total costs work to $1,70,000,000,000-$1.70 trillion.)
Total bailout package over 100 existing cos./businesses: $1.70 trillion.

Two million employees reinstated have $25,000 each in their hands, the domino effect is irreversible!

Where should the $1.70 trillion come from?
40% from borrowings.........................................$ 68 billion
30% for company taxes .....................................$ 51 billion
30% from individual personal taxes .................$ 51 billion




With 2 million people back to their jobs, and $ 50 billion in their hands, this purchasing power would be felt within 12 months, buying necessities, consumables, paying their fuel and electric bills, and some spare money left for replacing cars with new fuel efficient ones, a new set of white goods, this generating demand and reviving more companies and businesses. And the chain-reaction/multiple effect can be 10 times, which works to generating $ 5 trillion on a guess.

Who will listen?