$8.5 Trillion = $47,000 for every US Citizen between the ages of 20-64.
Dear Readers,
Though this is a massive over simplification of a good idea, please open this up to discussion.
There is 8.5 Trillion dollars pledged for the bail out (so far).
Using 2007 statistics, there are 180.7 million US citizens between the ages of 20-64.
Shouldn't this 8.5 Trillion be distributed amongst individuals/households/homeowners (with stipulations on what amounts would be taxed, must be used for debts, what amount is discretionary, etc.)
That would translate into about $47,000 per person between the ages of 20-64, to manage debt, and stimulate the economy in a real sense; paying back loans would stabilize the banking systems, consumer spending would save companies and reverse unemployment, and an automatic tax would get a good portion back into the federal coffers, to expedite the many reforms and rebuilding efforts this country so desperately needs.
Thank you for being a voice of reason.
Best of luck,
Baz.
P.S. Average household income was $46.326.00.
Though this is a massive over simplification of a good idea, please open this up to discussion.
There is 8.5 Trillion dollars pledged for the bail out (so far).
Using 2007 statistics, there are 180.7 million US citizens between the ages of 20-64.
Shouldn't this 8.5 Trillion be distributed amongst individuals/households/homeowners (with stipulations on what amounts would be taxed, must be used for debts, what amount is discretionary, etc.)
That would translate into about $47,000 per person between the ages of 20-64, to manage debt, and stimulate the economy in a real sense; paying back loans would stabilize the banking systems, consumer spending would save companies and reverse unemployment, and an automatic tax would get a good portion back into the federal coffers, to expedite the many reforms and rebuilding efforts this country so desperately needs.
Thank you for being a voice of reason.
Best of luck,
Baz.
P.S. Average household income was $46.326.00.
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If I were averaging 46 grand a year I probably wouldn't be such a grumpy camper right now but no, I don't like the idea at all.
What I would like is for the President AND Congress to open up the doors and shore up the loops holes so I can go about the business of getting mine on my terms. Don't need or want someone breathing down my neck about who, what, when and how I spent my money. ESPECIALLY for $47,000.00 dollars give or take a dollar or two.
On the other hand, for a billion, I'll come to the table and be more than happy to listen. Can't promise I'd take the money but I would definitely be willing to hear the terms.
March 30, 2009 5:15 PM | Reply | Permalink
The bailout is in loans you fools. The federal government will make all of that money back, and likely, back if we experience strong economic growth over the next several years.
And consider what the president has said about his budget being "inseparable" to economic recovery. Countless articles about various companies, especially the automakers, bring up the overwhelming cost of pensions and healthcare to their retirees. That problem will only get worse in the future, as the costs of healthcare inevitably rise and as more people are in need of care. Businesses will want to drop their coverage to cut costs. Suddenly, you will have to pay for your health insurance, and at a much higher cost.
And this is a very shallow analysis of just one of the many problems that go very, very deep. Experts in these fields write entire books about the issue and devote their lives to it. And yet the average man on the street has the sheer arrogance to think that his contrary opinion means anything or that it is even valid.
You wouldn't argue with a nuclear physicist about the technical details of an atomic bomb. But many people feel justified in generally disagreeing with many other types of experts.
The problem with democracy in a nation with mass media is that the ignorant may be easily swayed by even vile lies if they can be arranged correctly. The truth has only a slight advantage as content in that it can be universally justified.
We are all just ignorant. And he who disagrees is worse.
March 30, 2009 6:40 PM | Reply | Permalink
Must...remain......OUTRAAAAAGED!!!
March 30, 2009 7:23 PM | Reply | Permalink
Oh cut down on the fools. We fools do the best we can with what we got.
I bet you don't say things like: The bailout is in loans short people. Like short people would let you get away with something like that!!!!
or
The bailout is in loans road workers. Like road workers would not mix you up in the cement and make you one of those special markers in the road
or
The bailout is in loans, crippled people. You would not dare slander crippled people like that.
Us fools do the best we can and we do not worry about loans because they do not lend fools money.
Wait a minute here. That's exactly what happened.
Oh forget it.
March 30, 2009 9:44 PM | Reply | Permalink
Hell, I've been called worse so it doesn't hurt my feelings but what do you call a person who can't understand sarcasm???
March 31, 2009 1:36 AM | Reply | Permalink
The federal government will only make that money back if the loan is invested in a projected that generates enough money to pay the interest on the loan and the project can be monetized at the end of its life for at least the amount of the original "loan". It's not much different than getting a mortgage to buy a house.
You're making a really really big assumption when you say that the government will make it back. That assumes that the projects which the bailout is invested in generate enough cash flow to cover the cost of the bailout. Given the government's track record of spending money and getting little in return, I'm not as optimistic as you are.
March 31, 2009 6:11 AM | Reply | Permalink
I think you're confusing the bailouts with the stimulus package. The stimulus package wasn't made up of loans, except in the sense that if the economy picks up again, increased tax revenue could eventually make up the gap. The bailouts referred to are the TARP and similar programs that made loans to banks and other large financial institutions to keep them from going belly up.
People complain about the government's stepping in to do the TARP bailouts a lot--and while I agree that something smells fishy about the circumstances that got us to this point, the fact is, we're here either way--but what people often forget is, if the government hadn't stepped in to save AIG before it failed, the FDIC would have had to step in to cover all the bank deposits after they failed, which could have potentially wiped out the reserves, given how widespread the banking failures would have been. If that caused people to lose confidence in the FDIC, then there could well have been runs on the bank, causing further cascading collapse effects, and ultimately, costing still more public money to avoid an overnight slide into Great Depression levels of economic decline.
March 31, 2009 10:34 AM | Reply | Permalink
Can you imagine! Everyone runs to the bank to get their money, then they have these suitcases full of money with which they can start a fire. It would all be worthless paper anyway.
March 31, 2009 1:54 PM | Reply | Permalink
I agree there's a difference between stimulus and bailout. And yes the TARP money isn't "spending", it's actually a loan.
But the amount of FDIC deposits at AIG wasn't that great in the overall scheme of things at AIG. AIG's regular insurance business was outside the scope of FDIC and wouldn't have been affected by a bankruptcy. They could have easily split AIG into "GoodCo" and "BadCo" and left all the CDS stuff with BadCo and kept the traditional insurance biz at GoodCo. Most of "Main Street" didn't have money with AIG so I don't think it's as much of a confidence problem as you think.
March 31, 2009 9:58 PM | Reply | Permalink
I'm all for every penny we are using to bailout Wall Street being paid back. If all of the bailout money was in loans I would be much less concerned but I dont' think that is the case with much, if not most, of the bailout money being tossed around.
March 31, 2009 1:29 PM | Reply | Permalink
@INTP Economics:
Isn't it funny how the "loan" aspect of the bailout is so rarely mentioned. Or the fact that the bailout banks are chafing at the bit to give the money back, and three banks already have paid it back. They are very jumpy now that the stimulus law put reins on the companies who were bailed out. Goldman-Sachs is dying to get it paid off so they can go back to business as usual. And there's interest, too, payable quarterly. The first AIG bailout agreement was a very favorable interest rate - for the gummint.
March 30, 2009 7:19 PM | Reply | Permalink
The reason the loan aspect is rarely mentioned is that the government had to use that term to sell it to the public, and we all know it. This is a hand-out, pure and simple. The day we see this money back in any significant quantity is the day Michael Moore takes Bush to the IHOP for all you can eat pancakes.
March 30, 2009 8:09 PM | Reply | Permalink
And you know this with such certainty, how, exactly?
March 30, 2009 9:00 PM | Reply | Permalink
Is ignorance truly bliss? I envy you.
March 31, 2009 11:59 AM | Reply | Permalink
How does that even make sense? If the bailouts were only called loans in-name in order to make the public more willing to be on-board with them, wouldn't you expect to hear it repeated and broadcast all the time that the bailouts are just loans? The whole point of the comment you responded to is that you'd almost never know that the bailouts took the form of interest-bearing loans, from how the bailout is talked about by analysts and the press.
March 31, 2009 10:25 AM | Reply | Permalink
No, they really are loans. With quarterly interest due. And three banks have already repaid their loans in full in order to escape the restrictions placed on their activities by the stimulus. And Goldman-Sachs is trying to get all of their billions repaid this year. So if they weren't really loans, THEN WHY ARE BANKS REPAYING THEM?
March 31, 2009 1:29 PM | Reply | Permalink
Checkmate!
March 31, 2009 2:43 PM | Reply | Permalink
But lets see who defaults before we cont the profits. And when they do, it might be a good excuse to trace some of those supposedly untraceable funds.
BTW why did we NOT put a tracing mechanism into the first big Bush bailout? $700 billion was just vapor? Money doesn't disappear, it just gets pilfered. It went somewhere.
March 31, 2009 2:49 PM | Reply | Permalink
Hey way to get the alternatives out there. Here's what I suggested last week.
http://tpmcafe.talkingpointsmemo.com/talk/blogs/professorbalgus/2009/03/an-alternative-use-of-3-trilli.php
March 30, 2009 10:00 PM | Reply | Permalink
If we're not likely to get repaid anyway, my favorite alternative to the current form of the bail-outs was suggested by Jon Stewart on the Daily Show:
Take ~$800 billion and pay off all outstanding consumer charge account debt. Seems to me it will do a few good things:
-The cash will go to the banks anyway - increases their liquidity(downside: wipes out their interest income)
-Removes hard to value consumer debt securities from their books
-Forestalls the next crisis: securitized consumer debt defaults
-Consumer debt reduced/eliminated
-Reduces financial burden on the already unemployed
-Frees up consumer spending for those still employed - should spark a bit of spending
-Eliminates one large category of possible future bail-out requests
March 31, 2009 11:23 AM | Reply | Permalink
Stewart left out paying off all outstanding student loans, as many recent grads can't find work and thus can't pay off their loans, and many of those who have found work are making a fraction of what they should be
March 31, 2009 2:35 PM | Reply | Permalink
Good grief, that makes way too much sense for EITHER the Dems or Republicans to consider.
C'mon, folks, lets get real here, this money will flow to the rich, not to the general economy, and they will trickle it down all over us.
Why am I so certain? How many of the people involved in actually managing this whole economic debacle are worth less than $1 million?
We could use some good old fashioned middle-class economists/public servants who can happily live on 50 grand a year. Let THEM organize this transfer of wealth.
March 31, 2009 3:07 PM | Reply | Permalink
You got it all wrong, if it gets distributed at all anywhere but through banks as credit, what it will turn into is $4,700,000 apiece to every millionaire.
How many yachts will they buy?
March 31, 2009 2:35 PM | Reply | Permalink
As for those of you whom are still into playing the blame game, and griping about the top fraction of a percent, and the ways of the world, you are not helping. Your time will come, and your opinions are very important if not entirely accurate. For now however, I would hope that all good minded citizens of the world endeavor to apply their energies towards moving forward and supporting any and all means, ideas and opinions, that stay to the point of how we step back the detrimental course of the current crisis.
We need to put America to work, to do that we need jobs, for jobs to be available we need domestic consumer spending (in the sort term at least).
Towards this end I am putting up a new post:
"America and China A Switching of Economic Demand Strategies."
Answer intelligently, not biliously, -our children, history and the World will take note.
Thank you for your input.
Peer Bazarini.
April 1, 2009 11:59 AM | Reply | Permalink