Why didn't the mafia just close the loop on the first kill?
Wouldn't it be the obvious thing to do? That way you don't have to worry about people wondering if the next one is them.
It's possible that some loopers were left opportunities for advancement. If each looper killed himself right off the bat, how could they ever recruit upper management? Maybe outside of what Levitt's character explained, it was possible that some loopers aren't killed, and are instead promoted. Having a looper off himself first would mean that none would even try (although the way Levitt explained it, they wouldn't be the type anyway).
If not, then you're right though, having them close their loop in the beginning would work.
No it doesn't make sense to do that because when would the Looper know when he was done killing or if he would get more hits. The Loopers are handling this and are handled as if it's a business arrangement. Nothing more. Yeah they kill but it's somebody in the future. "Who cares if an old man dies?" is the mentality they have. The end of your contract comes when you close your loop because how else would you guarantee that there is going to be more hits if you've already closed your loop. It'd be easier to get people to do a one time hit and kill themselves then it would be to make Loopers but less people would do that. See closing your loop is the last hit you take. You are of your contract after that. No more easy money. When you start though it's nothing but easy money and a lot of it but you know it doesn't end until you close your own loop. You are now a happy employee making easy money.
If you started your career by killing yourself that could cause some mental problems for even the least forward thinking of people. We can see this when each Looper is shown closing their loop. They look scared and it takes a toll on them when none of the other hits have but then they go out and party because what else are you going to do when you know how you will die. One more thing there is the potential that if someone started by killing themselves it may alter their mental state enough that they will try to do something that could alter time. Once a Looper ends their loop they are in a set pattern that ends the same way. If you started a Looper by ending their own loop then the pattern could change. Which is probably why Loopers that don't complete their loop end are hunted. Also Joe is an example of time changing because a loop wasn't completed correctly.
Nobody seemed to care much if the next hit was themselves since Loopers were specifically selected to be thoughtless, partying goons. It never struck me as if they gave much thought to their future selves before they had to close their loops. Which was also part of Joe's character arc; his self-destructive and meaningless life gave rise to the conflict with old Joe, who had found a meaning with his life and wanted to protect it, and young Joe who began finding it with Sara and Cid. The Loopers are aimless and self-destructive, that was their thematic and plotwise trait.
Doesn't seem very efficient. They'd have to go through all the hassle of recruiting and training the looper, only to use them once before killing them.