Sunday, October 19, 2008

The People's Rescue Plan

[UPDATE 01/03/09: A friend of mine was kind enough to point out that my math in this post is completely wrong. Hence, I should probably stay away from beer when planning to write publicly. That said, it doesn't matter, because the government has no clue where the bailout money has gone anyway...]

Senator Obama, and others, like to talk about "trickle up economics", based on the notion that the GOP's "trickle down economics" have failed miserably. Yet, all of the financial decisions of the last month have been more of the same.

First, the 700 billion bailout rescue, plus 150 billion of pork - although most people are now rounding this up to one trillion. Next, Paulson, et al, had to apparently beg the nation's banks to accept a bailout plan transferring 250 of the 700 billion, supposedly motivating banks to lend to each other again. Excuse my candor, but that is bs. It's the TAXPAYER'S money - if the banks don't want it on OUR terms, then let them fail.

So, here we are transferring yet more wealth to corporations and the wealthiest (greediest) individuals in the country, all of whom got us into this mess in the first place, along with a Congress all-to-willing to remove regulations that in hindsight, were apparently working effectively.
Let me get to the point and get this post over with. My father George and I have devised our own plan, based on the "trickle up economics" everybody loves to talk about, but refuses to act upon. Enter, The People's Rescue Plan.

Based on the 2005 US Census, there were about 200,000,000 (rounded up) people in the US age 25 and up at the time. Here's the total breakdown of numbers we're working with from the report:
  • Male - 141,274,964
  • Female - 147,103,173
  • Total - 288,378,137
  • Total 24 and Below (35%, rounded up) - 100,932,348
  • Total 25 and Up - 187,445,798
  • Rounded to 200,000,000 to compensate for under 25 taxpayers
Now, this plan is actually a primary proposal, with a secondary proposal baked in. The primary proposal involves 300 of the $700 billion bailout package. In true "trickle up economics", each of the 200 million taxpayers would receive $1.5 million with which to pay off their mortgage, car loans, student loans, send their kids to college, pay for healthcare, and the list goes on. Following is an incomplete list of Pros and Cons - my Father and I, after all, are not economists, so the details need to be worked out by people smarter than us - first the Pros:
  • The $700 billion is our money - give some of it to US.
  • With loans, credit cards, and other money-pits paid off, tax paying Americans will have more money to spend, generating growth in the economy, propping up merchants, retailers, and service providers.
  • Taxpaying Americans will once again be able to support charitable organizations such as the Red Cross, American Heart Association, Salvation Army, and the many other charities that are suffering from our inability to give during these tough times.
  • It will stifle, if not eliminate, the alarming trend of wealth transfer from the lower classes to the top 20% of wealthiest Americans. Note, this plan currently includes those wealthiest individuals to be fair, but we would not be opposed to a cap on earnings, limiting a wealthy individual's payout, or exempting them from a payout altogether.
  • Paying off mortgages eliminates the need for a separate bank bailout. Banks will now be flush with cash, virtually all "bad" assets will be removed from their books, and the injection of cash, if invested properly, will offset the loss of interest from mortgages.
  • Foreclosures will almost completely cease. Foreclosures are costing banks MILLIONS. Not to mention kicking families out of their homes - the last thing we need in this county is more homeless and starving people.
  • Taxpayers won't be paying the salaries and bonuses of the assholes that got us into this mess!
  • Violent crime would decrease.
  • ALL taxpaying Americans can take advantage of the awesome deals available on the stock market right now. Read: Not just Warren Buffett.
  • ... and the list goes on.
Now, some of the Cons we've come up in our discussions:
  • Inflation. Obviously, making millionaires out of 200 million people is going to cause greedy bastards to come out of the woodwork, and prices for goods and services could rise to absurd rates. Preventing this will require some type of government regulation. Again, we'll leave it to the smarter folks.
  • The value of the dollar could plummet due to all the "paper" millionaires in the country. There are bound to be steps that could be taken to prevent this.
  • Dumb asses. You're going to have stupid people that think they can live forever on the money, quit their jobs, and become millionaire bums. $1.5 million dollars won't last very long, and a couple of years later we'll probably have people looking for handouts. There will be people that won't pay anything off, and will be greedy and piss the money away gambling, or on other ventures. The only solution we can see to this is some type of regulation - perhaps a lump sum to pay off the mortgage, and then structured payments after that, with which the government could make money on interest generated from the $300 million fund.
  • Speaking of regulation - we need a government management operation to oversee the entire process. This will cost money, which is why it's in the Cons column. We envision this department would also conduct investigations into price gouging and other unscrupulous conduct of greedy and shady buggers trying to take advantage of the opportunity.
  • Identity theft and other cyber crimes may increase.
  • Some people will not help the economy - they will take the money and move to a developing country where they can live like royalty the rest of their lives. To this, I say, go for it - but don't come crying to us if you mismanage your money and have to come back to nothing.
So, these are the main points we've come up with, but I've no doubt there are many more considerations to take into account. We'll leave fleshing this out as an exercise for the reader - and the government.

Finally, we realize there's going to be an "oh, hell no" factor to this from many that read the proposal. As we've laid out, there are inherent risks in creating 200 million millionaires. As a secondary option, we provide this proposal, which would cost significantly less than the previous:
  • Pay off every taxpayer's mortgage, up to a reasonable amount.
The government is already talking about guaranteeing mortgages that are near, or in, foreclosure. Take it a step further - pay them off, pay ALL mortgages off. Although to a lesser extent, we'd see many of the same benefits, but with fewer of the associated risks or Cons. The secondary plan also has some inherent Pros, such as easier management.

In conclusion, we believe "trickle up economics" can work, and have outlined the how and why in this proposal. The catastrophic mismanagement of the economy by Congress, the Bush Administration, and greedy buggers on Wall Street requires an equally powerful solution, and all we've seen from the government so far is the same old crap, designed to help their friends that helped get us here in the first place. The lower classes are the foundation of this country. If you make success possible for us, those at the top of the pyramid prosper, too.

Joey and George Peloquin