If Congress really wants to turn the economy around quickly:
1, Require credit card banks to reduce interest rates on all existing and future credit extensions to 200 basis points above their cost of Fed Funds, regardless of the perceived risk of the cardholder.
2. Immediately and for the next 18 months, cut income tax withholding on individual taxpayers by 50% and adjust personal income taxes accordingly.
3. Immediately discontinue taxing income generated by unemployment benefits, Social Security benefits and other qualified retirement plan disbursement for one year.
4. Any bailout funds given financial institutions must be used for third-party loans and the loans secured by the appropriate amount of 1st position preferred stock of the bank, issued in the name of the US.
Each of these immediately puts spendable income in the hands of the consumer. That is the only efficient way to 1) turn the economy around and 2) know whether or not its working without having to wait for two or more years.
We had another thought...instead of giving the banks billions, the government could just divide it out to all taxpayers in cash..it would be tens of thousands of dollars to each person. You don't think THAT kind of money wouldn't be recirculated back into the economy?!!!
Bill - I hadn't realized they taxed unemployment benefits, and social security benefits. But I certainly agree with most everything you have said. I also like Paula's idea of just dividing the money and distributing it to individuals to spend. It has been estimated that the first bailouts will add $17,500 per household in taxes. That would be a really nice shopping spree indeed.
Thanks Myrl and Paula....Great comments.
Estate planners know what most Americans don't. Never give anyone a lump sum. The majority will go on a big spending spree and it will all be gone in a matter of months.
Same is true here. You want people to infuse money into the economy a bit at a time over a long period.
But lacking the popular vote to have it distributed that way, giving everyone a lump sum makes far more sense than everything else that has been proposed.
Bill, if only those in power would listen to reason, instead they are Determined to give another 800 BILLION or more to another round of corporate raiders. Its the fleecing of the American People in plain sight. I'm sickened by it.