Nearly a year into the Obama administration I think Americans can see that the No.1 issue in the nation’s mind – the economy – is still sputtering. Bank bailouts and all that stuff just aren’t working fast enough.
As Mighty Mouse used to say, “Here I come to save the day!” So here’s my simplistic approach to ending the Recession.
The United States of America has the highest bond rating possible – AAA. That rating means that the U.S. is not likely to default on debt. Thanks to the Bretton Woods Accord back in the 1970s, the U.S. dollar is no longer backed by the gold in Fort Knox. The American dollar – of which there are 829 billion – is backed by the government’s ability to generate revenue to pay down it’s debt.
New dollars are issued when the Federal Reserve elects to fund the purchase of debt, which is usually through U.S. Treasury Bonds. Done in excess, this can cause inflation, but bear with me.
The net worth of Americans is currently $53.4 trillion. Prior to the Recession, it was $64.5 trillion. In other words, we’ve lost 17.2% of our worth. By the way, $348 billion of our collective $53.4 trillion is household real estate holdings, i.e. your house.
That’s the background, now my proposal.
Let’s give each American household $10,000 tax free. With 105,480,101 households, that’s $1.05 trillion.
There are 7.7 million businesses in America. Let’s give them each $100,000 tax free. That’s a mere $770 billion.
So add it up and the American government can print and distribute $1.82 trillion. This isn’t money raised by taxes. We’re just gonna print it and give it out. There’s just one stipulation – the money can’t leave the country. It can’t be sent to relatives in Nicaragua or used to hire workers in China. It has to be spent in the 50 states.
Think of the ramifications. The boost to the economy will be incredible. Some people will pay down debt or save their homes, while others will buy TVs, cars, and yes, useless junk. Some might even use some of the money for booze, cigarettes, and methamphetimines, but that can’t be helped.
All this will turn into many of the 7 million people laid off from work since the beginning of the Recession getting gainful employment again. For every dollar currently in circulation, there will now be three dollars. Banks will start lending again and the good times will roll. States will see an increase in sales taxes collected, easing their budget pains.
The nay-sayers will yell that my plan will cause inflation. Sure, it will. But it’ll be manageable, maybe 10% at most and it will be a one-time thing, just like my giveaway windfall. But the trade-off of jobs and reduced personal debt is well worth it. The American economy will have the jump-start it needs.
Some might call my plan crazy. But at least I have a plan.
And I bet you’re smiling and already thinking about how you’d spend your $10,000.
- Mountain Man
http://www.MountainManandCityGirl.com
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