HOW WOULD YOU FIX THE ECONOMY?

[Cookiely]

This was an article from the St. Petersburg Times Newspaper on Sunday.
The Business Section asked readers for ideas on "How Would You Fix the Economy?"
I thought this was the BEST idea. I think this guy nailed it!

Dear President Obama,.............Patriotic retirement:
There's about 40 million people over 50 in the work force; pay them $1 million apiece severance with stipulations:
1) They leave their jobs. Forty million job openings - Unemployment fixed.
2) They buy NEW American cars. Forty million cars ordered - Auto Industry fixed.
3) They either buy a house or pay off their mortgage - Housing Crisis fixed.
No joking. Its simple. Its cheap. It could work.

[coriolis]

If my math is correct, that would cost only about a trillion. That's probably about what they're throwing at all these corporations.

After buying a house and a car, what's left would last about 10-15 years if they use it wisely. Just in time for social security benefits.

I agree, that giving the money to the consumers, even with a stipulation that we buy an american car would help more people than just handing over money to the corportions so they can give out big bonuses, or pay their people to do nothing.

If the consumers were to suddenly buy a lot of cars it would create a huge ripple effect through the dealers, manufacurers, employees, parts suppliers, basic material manufacturers, etc etc.

[Cookiely]

Its a shame its so simple. The government could never handle it. A friend told me the other day that the government should turn over the mail service to a private firm such as fedex and they would save money. Its brilliant but it would never be done. The great percentage of people have computers now and whether or not you pay online you can certainly be billed online and save postage. Why doesn't the electric companies and other utilities bill people on line and save money?

[x-y-no]

If my math is correct, that would cost only about a trillion. That's probably about what they're throwing at all these corporations.

Umm ... no.

40 million times 1 million is 40 trillion.

Way, way more than the huge numbers we're already tossing around.

[MGC]

The gov did nearly the same with the Katrina relief. With all the monies that was spent on temporary housing and other relief, the gov could have bought every one that lost thier house a new one cheaper.....MGC

[Stephanie]

The gov did nearly the same with the Katrina relief. With all the monies that was spent on temporary housing and other relief, the gov could have bought every one that lost thier house a new one cheaper.....MGC

They still would've needed temporary housing, food, etc. before the new homes were built. I don't doubt that there was a lot of money that was lost through the cracks.

[coriolis]

If my math is correct, that would cost only about a trillion. That's probably about what they're throwing at all these corporations.

Umm ... no.

40 million times 1 million is 40 trillion.

Way, way more than the huge numbers we're already tossing around.

Oh what was I thinking
Yes that's different.

I was probably doing the math while someone was talking to me.


This whole idea would be politically impossible anyway. Giving money to the 50+ year olds, who are already established, making good salaries, and have their kids out of the house for the most part. You'd have the younger people screaming bloody murder - making them get jobs and work for money. You couldn't just replace overnight a lot of the experienced knowledgeable workers either.

[lurkey]

The great percentage of people have computers now and whether or not you pay online you can certainly be billed online and save postage. Why doesn't the electric companies and other utilities bill people on line and save money?

Not everyone has internet access, a lot of their customers are low-income, elderly, visually-impaired, etc. . . and even though they have internet access, they don't think it safe enough to pay online or receive such information online. . .etc. . not that I am knocking the idea. I pay all my bills using Billpay through my credit union . .. but only using my laptop (Macbook, Firefox). .. I won't use the computer at work (Windows and Internet Explorer) or any of my parents' computers.

problem with buying all new American cars. . .is what will happen to old cars?. . I only need 1 car.. . . and quite honestly, I like my little Honda that was built in Georgia. . . though for 1 million, I'll leave my job, might have to get another one stave off boredom, though. .. no problem about the mortgage, though I will probably turn around and sell it. ..

one itsy-bitsy problem with the solution: Solution should have said cars made by American companies; Japanese and German companies make cars in the United States for the American and Canadian markets, so those could be American cars. . . yes, I know that is a slight technicality, but it is reason I have no problem, despite having family being retired Oldsmobile workers, buying a Honda or Toyota .. . . American workers still built those cars. . .

[Derek Ortt]

1. Reduce government spending by 1/2. Yes, this includes freezing social security for those who are not currently entitled to it as well as reduce social programs such as welfare

2. Once we see an economic recovery from our current recession, increase taxes by 15% across the board. This will be used to not just balance the budget, but to pay off the national debt

3. Once the debt is gone, a flat tax of 25% would be instituted

[Ed Mahmoud]

Best 'stimulus' in the world, and the only New Deal era program that actually ended the Depression:



Build up the armed forces for threats from the once and future Soviet Union, a somewhat hostile China, their surrogate North Korea, and possible WMD threats like Iran. Aircraft manufacture in Washington State and Missouri and Texas, shipbuilding in Mississippi, Virginia and Maine, tanks and other vehicles in Michigan and Ohio. Military bases expanding in California and Hawaii.


The tiny part of the stimulus bill that actual rebuilds aging interstates and bridges is good, but that could be increased.


Since half the country pays almost 90% of the taxes, the 'tax fairness' question has been more than settled, and calling checks to very low income workers who don't already pay taxes "Tax Relief" is disingenuous. There is a happy spot on the Laffer Curve where tax rates aren't too high or too low, and we are near it, maybe even a bit above, as far as maximizing government revenue. High taxes to fund socialism in Europe means permanent unemployment rates near 10%, and entry level (teens and 20s) unemployment rates in the teens.

I actually like the new car warranty program. It will let GM go through bankrupcy, get rid of the ridiculous union contracts, get contracts more closely matching the ones Toyota and Honda have with their American workers. The bondholders and share holders, well, they're not going to like it, but getting labor and benefits under control, and cutting Saturn, Pontiac and Buick, and shifting GMC strictly to large trucks and leaving pickups to Chevrolet, will do wonders there.

BTW, a one time two year credit for all US/Canada/Mexico assembled cars (including Toyotas, Subarus and Honda built in the US, otherwise you risk a trade war) of a couple of thousand dollars would get people spending again on cars as well.


Finally, trim back the non-infrastructure stimulus, it already has the Federal Reserve printing funny money to buy T-Bills, which will be both inflationary and make it more expensive for private industry to borrow. The stimulus is a sugar rush, quick high now, followed by a bigger crash later, IMHO.

[Ed Mahmoud]

BTW, expanding Pell Grants is a bad thing.


I received Pell Grants, along with limited Veterans benefits (darned pre-New GI Bill VEAP program) and academic scholarships.


But if the government offers Pell Grants and cheap subsidized loans to almost everyone, and colleges aren't just opening new classes left and right, it triggers a supply and demand distortion, and colleges will just raise tuition. Actually, if higher tuition triggers larger grants, than colleges are incentivized to charge high tuition.


There are certain fields where government pays a fair amount of the bill, medical care, and higher education, and those two industries consistently see prices rise considerably faster than inflation. There is a reason why.



BTW, I am happy with my family's medical insurance, and would prefer not to be forced to take part in a massive single payer federally controlled plan that would cause unexpected distortions in the market and unintended bad consequences.

[streetsoldier]

Privatize everything...bureaucrats in Government on all levels fired, and must compete in the job market for their employment.

Federal Gov't is reduced to its three Constitutional functions...administration of justice, preservation of internal order (commerce), and provision for national defense.

All other powers, per 10th Amendment, fall to the States (collective) or the People (individual), as already delineated in the Bill of Rights.