Oh, I agree it's really cool and all, but compared with job losses in the 10's or 100's of thousands... I'm just not sure that it'll make much of a difference in terms of "help stimulate the economy and help liquidity start flowing again".
But that's no argument against it, or saying it's not important; just that perhaps getting a few more people investing is not going to fix the economy overnight.
I don't think it'll make much difference now, but I wouldn't be surprised if a program like this is the catalyst that sparks the recovery a couple years down the line.
Most hacks take a few years to really show their impact, but somebody's gotta do it, or we'll be in a depression forever.
I think the effects of a few more people investing are probably minimal compared to N * 100 billion dollar stimulus package kinds of things, GM going into bankruptcy, etc... (Whether you view the effects of that as positive or negative).
That doesn't mean it won't lead to good things, I'm just skeptical of a smallish conference in terms of "saving the economy". I don't think that's really it's purpose in any case.
So the way to figure out whether that means anything at a large enough scale to matter, is to look at how many angels might invest how much money. I honestly have no idea, but here are some random numbers:
10,000 investors invest 10,000 dollars each is 100 million dollars. You could vary that to 1,000 investors doing 100,000 of investment each. 1,000 investors each doing a million dollars would be 1 billion dollars. What relationship do those random numbers bear to reality? Has YC even spent a million dollars on all the companies involved? And there are several people investing in YC, so I think it probably comes out to less than a million a head, and they've been doing this for a while now.
The real impact of startups is not likely going to be in hiring in any case, but still, it's worth looking at some numbers to get an idea of the order of magnitude that we're talking about.
For the first part of your math, YC has spent at least 1.5 million (~300 founders * 5000). Team sizes vary, but if we hold them at 3 members, we get another half mil. So by my very back of the envelope calculations they've invested about $2 million.
We need to add another 100 ghost founders to account for the extra $5,000, so that makes it: ~350 founders x $5,000/founder = ~$1.75 million invested, so far.
Y Combinator has (I personally believe, but do not necessarily know to be true) additionally sunk capital investment into:
* Beans and rice
* A building and associated land in Boston
* A building and associated land in Mountain View
* Utility bills
* Travel expenses
* Legal fees (including 102 incorporation-fee packages)
* Accounting fees
* Misc.
But that's no argument against it, or saying it's not important; just that perhaps getting a few more people investing is not going to fix the economy overnight.