Our Economy and Bailout Plan/Solution





I just wanted to post on here a post that I made on another board considering the state of the economy and the bailout plan. I hope everyone enjoys!




Comment by Michael Intravartolo

First, let me say that I am an avid fan Cody of you, Happy Hour, and the Fox Business Network! I love the people and the commentary.

Second, let me touch on a comment by Mark Stamoulis:

Comment by Mark Stamoulis

Sep 26th, 2008 at 12:06 am

Think about how much we could get for the $700 Billion Bill in Washington now. I’m ready!!

Do The Math….. (I’m not the author)

Personally, I’m against the $85,000,000,000.00 bailout of AIG.

Instead, I’m in favor of giving $85,000,000,000 to America in what I call a “We Deserve It Dividend.”

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Ya with me?

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… ya with me?

So divide 200 million adults 18+ into $85 billon that equals $425,000.00… ya with me?

My plan is to give $425,000 to every person 18+ as a “We Deserve It Dividend.”

Of course, it would NOT be tax free. So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family? Pay off your mortgage – housing crisis solved.
Repay college loans – what a great boost to new grads! Put away money for college – it’ll be there!
Save in a bank – create money to loan to entrepreneurs. Buy a new car – create jobs
Invest in the market – capital drives growth. Pay for your parent’s medical insurance – health care improves.
Enable Deadbeat Dads to come clean – or else… ya with me?

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 $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – 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 $85 Billion -”We Deserve It Dividend” more than I do the geniuses at AIG or in Washington DC .

And remember, this plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest.

Here’s the problem I have with this:

1. Mark proposes 85 billion for the people. Well, 700 billion equals 3-6% of the current outstanding balance on US mortgages. So, 85 billion wont do too much.

2. Helicopter Economics, simply put if you were to dump money into our financial system to stimulate our lagging economy, inflation usually results. That means if the income of every individual goes up, well, product price will also have to go up. Scarcity is a major fundamental tool that is used to yield a profit and would basically be gone with the wind.

3. Not to mention once the equilibrium is restored to our current levels, the market would literally go into shock again, then contract, and companies all over would simply be out of business because they would not be able to reduce costs of production at the same rate they are reducing prices.

Verdict: Failure.

Now, to touch on Cody’s very well thought out article. I am probably one of the few who are for this proposed bailout. I amm not sure if I will be for every aspect of the bailout, simply because I do not believe anyone knows all the terms right now and we (the public) keep hearing different view points, etc., so it is fairly hard to distinguish correctly. Yes, I know that the tax payer will have to pay for this bailout but at the same time is the taxpayer really thinking about what potential problems he or she could face if we have another Black Tuesday type of a situation? Is the tax payer really ready to risk not having a bail out plan/solution? In all honesty, I really do believe that if you sit the average person down, explain the situation, they would not be willing to risk not having a bailout plan/solution. There is a great quote by Gore Vidal that says, “Half of the American people have never read a newspaper. Half never voted for President. One hopes it is the same half.” In this situation we must realize that at least half (most likely a lot more) of the people do not follow Wall Street and are making their judgments simply by the fact that their taxes might go up. I on the other hand follow Wall Street more than some, not as much as others. Alright, here’s why I’m for the bailout solution/plan:

1. I personally doubt we will spend all of the $700 billion.

2. After the treasury buys up the troubled mortgages they will try to resell them to investors and what not and this could raise the value of these mortgages.

3. Lets face it, a lot of credit lines are frozen and without a bailout plan I do not foresee improvements for a lengthy period of time. Chances are credit freezes will only get worse.

4. There’s immense potential for profit. (Yes, I like others am anxious to see how the “potential” profit is dealt with.)

5. The most important factor in my opinion, to restore consumer confidence. Oil went up and caused people to pay more attention to their cash flow and profits. In my opinion, this was the beginning (maybe not the exact first sign but in the beginning) of our recent problems.

I apologize for the long post Cody, but I rather struggle with potentially higher taxes than to have to deal with another depression and not know where the next paycheck or meal for that matter is going to come from.

No comments :

Post a Comment