I receive my fair share of email forwards as I am sure most of you do as well. Occasionally, there is one in the bunch that is clever and noteworthy. Today, I received one from my friend Jon that really made a ton of sense. So much so, that I decided to post it onto my blog word for word.
Take your time and read it. It makes a ton of sense, now I am not an economist (neither are the people we elect by the way) nor am I an accountant but this plan really makes me think. Send me your thoughts, is this fantasy or reality, either way its a place I want to be!
Btw, thanks for your comments on my last post although it seems that only right wing conservatives have the time to reply (a call out to all my left of center friends that are letting these right wing comments go unanswered!). I look forward to hearing from you all. Enjoy, its a definite eye opener.
OSO.
The "We Deserve It Dividend":
I haven't run the numbers since my calculator won't go up this high (I guess only "government" calculators have this many numbers) but the concept is valid. The Government is talking about a bailout of our financial system totaling about 850 billion, (which is technically not a bail out since many of the assets bought will be sold later at a higher price). Sort of puts the bailout investment in perspective.......I'm against the $850,000,000,000.00 bailout. Instead, I'm in favor of giving $850,000,000,000 to America in a We Deserve It Dividend.
To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up. So divide 200 million adults 18+ into $850 billon that equals $4,250.00. My plan is to give $4,250.00 to every person 18+ as a We Deserve It Dividend. It means that every adult 18+ has $4,250.00 in their pocket. A husband and wife has $8,500.00 in total.
What could the average American family do with $8,500.00? Get current on their mortgages - housing crisis solved. Put away money for college - it'll be there. Save in a bank - create money to loan to entrepreneurs. Put a deposit to buy a new car - create jobs. Invest in the market - capital drives growth. Pay for medical insurance - health care improves. Enable Dead beat Dads to come clean - or else. Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed by one of our candidates for President. If we're going to do an $850 billion bailout, let's bail out every adult U S Citizen 18+!
As for AIG, and the others- liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up.
Here's my rationale. We deserve it and AIG doesn't. Sure it's a crazy idea that can "never work." But can you imagine the Coast-To-Coast Block Party. How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $850 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC.
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5 comments:
Oso,
I don't have much much time to comment, so I'll keep it short.
This solution is like the famous math proof that states 1+1=3. It's a beautilfully worked out solution, and at first glance you think to yourself, "Wow, this makes sense". But when you really look at it, you find that the only reason it worked, is becuase the solution hid a number divided by zero in a very complex equation. Well, that tiny mistake makes the entire solution invalid.
Such is the case here.
Why, you may ask?
Well, that's becuase the 85 billion that they are using is money coming FROM YOU. So the 'we deserve it" dividend is nothing more than taking money from your left pocket, giving it back to you, AND charging you tax on top of it.
So in reality, you would be LOSING money, not making any windfall profit.
The truest line in the whole story was the one that said 'never work'.
Not really, because this was money that they already took from us, so rather than taking it and returning it to a different pocket (AIG) they are returning it to your pocket minus the tax. I would take that any day!
OSO.
Sure, keep giving the government the right to take your money and giving you MOST of it back. They do that over and over, and you find yourself with almost nothing left.
No, if we live in what we like to call a free-market society, we have to let the chips fall where they may. Let AIG, WaMu and any other company fail. Those left will be stronger in the long run.
Ever ask yourself how come JPM Chase could afford to buy WaMu now AND Bear Stearns back in March? The answer is becuase as a financial institution they had rules which they actually followed. They didn't take the road to easy gains. Those are the companies that should remain standing when all is said and done.
There is definite merit to what you are saying and it does hurt to throw good money after bad money, but in my view, in this situation a bailout of some sort is necessary.
When your house is on fire because your child played with matches, you first put out the fire so your whole house does not get destroyed, then you teach your child not to play with matches.
A bailout is needed, I wanted to illustrate that there is definitely more than one way to do it.
OSO.
BTW, You still haven't properly corrected your math.
You are still overstating the 'dividend'.
85 bil divided by 200 mil equals 425 dollars. Not much of a party,eh?
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