Claudio's Economic Recovery Program

[claudio512]

I made a similar proposal in Atarraya* many moons ago. However, 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 a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens over 18+ years of age.

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...

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person over 18+ years of age 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 graduates

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

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, The Claudio's 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.

Kindest personal regards,

Claudio

PS: Feel free to pass this along to your friends and family as it's either good or a tear or a very sobering thought on how to best use $85 Billion!!

* Old webpage at MIT [Massachusetts Institute of Technology]

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[justaguyinokc]

85,000,000,000/200,000,000=425

That's $425 dollars, not $425,000. So, essentially, a couple of new tires for your 8!

[lezonebay]

and have them pay 3,000 per head. they say 12Million people at least or more. thats 36,000,000,000 USD to the goverment. then make them pay tax, which estimated at about 3000USD per head again.
Give them temporary papers up to 3 years. in that time frame they have to show tax being paid, continues employement and no crime.
after 3 years grant them permanent status. at that time ask for more money, a grand or two would be realistic.

Instant boost to the social security and tax dollars after just 1 year.
Plus then they would buy houses and cars and furniture and suchs as they would know they have a future here.
when they buy the small houses people who are already stuck in the small house would be able to buy a bigger and those people an even bigger etc.
the real estate market would be alive again. the products would be the same what they make but their income would be taxed. they could get insurance for their vehicle. they would stop using 1 truck for 20 people as they would have driver licenses finally.

They would stop living as a deadbeat because they would not be afraid to loose all.

from the money you can secure the border. help the citizens. help the people of the government, even help the dumb companies who goes bankrupt. the money would make the US again a dominating country.
stop buying a chinese crap, make the same crap at home with mexican legalized labor. they need a supervisor, a truck driver, etc. more job would be created then lost to them.
plus they money would stay in the US instead sent to mexico and other countries.

once the borders are secured and the money is trapped in, we could start manufacturing again with tax breaks and helps from the big corporations. Make them stay here. if you build here give tax break, if they take the job to mexico, china, malaysia, give them a tax as foreign manufacturing business tax - a us company manufacturing products outside of the country would have to pay 15cents for each dollar they ear extra due to the lower costs.
that would deter some and make others to pay.

the country is not in bad shape but its head is rotten. in fact it looks like its been dead for a while.

[Mark in SBA]

Uh, AIG didn't receive a no-strings grant of $85B from the U.S. Government. It's a <u>loan</u> collateralized using AIG's assets with some extremely severe penalties attached.

24 month term
LIBOR + 8.5
Stock warrants (essentially U.S. Government gets 80% of the company's stock, wiping out the common shareholders)
U.S. Government has veto over new management

Like the Chrysler bailout, taxpayers stand to make a windfall on this deal once the economy rebounds and AIG successfully restructures its giant porfolio. The issue here is simply time, which the government has lots of versus investors looking to short the market.

[cruppelt]

Mark,
Thank you for this short and precise explanation. Put in these terms I do feel a lot better about this, especially after hearing the news about WAMU and the 700B bailout plan that came out today. I only hope things start changing after January 20 2009...Chris R
1991/850i

[Mark in SBA]

I love all the idiots trying to blame "fatcat CEOs" for this mess. The responsible party is, uh, you (and me). We took out seconds on our homes and then blew it on boats, vacation homes, trips to Cozumel, and other nonsense bling all in the name of "consumerism" necessary to prop up our Starbucks-based economy.

Also, several million idiots signed mortgages they knew they couldn't repay. Ordinarily underwriting standards would be sufficiently high to keep these guys out of the market, but in 1999, Franklin Raines, head of Fannie Mae and ex-budget director under Clinton, decided on his own to lower lending standards to encourage "low-income" home ownership. Fannie Mae essentially buys up and repackages all the qualifying mortgages in the U.S., and thus set the new standard in lending which got us where we are today.

Law-abiding folk piled on to this debt orgy with "cash out re-fis", since the inflationary real estate market make all of us overnight millionaires.

Another idiot, Alan Greenspan, stood by pumping money nobody needed into not one, but several, bubble markets with interest rates down at 1 and 2 percent. People took that excess, sloshing money, and essentially blew it.

Then the Bush Administration decided well-off seniors needed free prescriptions. Tack on another 100 billion in debt that'll never be repaid.

So, there you have it - the culprits, in order:

1) You
2) Franklin Raines
3) Alan Greenspan
4) George Bush
5) Bill Clinton

Wall Street just did all the schlepping and collected their customary fee.

[lezonebay]

The iraq war cost as much as any of these spendings. For what ? to see the gas/oil prices elevated and a country who had no WMD and No real terrorist organization getting into a freedom war agains the US ? Its a war nobody can win. Its good for one thing, to make a few hundred or thousand people rich.
BS War from day one.

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1997 BMW 840CiA
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1995 850CSI CD00177 (1/2)

[Mark in SBA]

Middle eastern politics up to the Iraq War was predicated on the Sykes-Picot Agreement partitioning the ME after the fall of the Ottoman Empire in WWI. That's why you see all those straight lines on the map - they're arbitrary. In quick succession the British then implemented the Balfour agreement, tacitly approving a Jewish state in Palestine. Britain took over a huge swath of the ME under the British Mandate, and went hog-wild in Iran with Anglo-Iranian Oil Company, a predecessor to BP.

And Britain left the ME a mess as they withdrew under a post-colonian policy of retrenchment, leaving despots and monarchies to duke it out.

Ridding the ME of Saddam and his Baath party was a strategic move, eliminating a thug from the neighborhood and replacing him with a stable democracy incorporating the de facto majority of Iraq, the Shia. Think back to Reagan's "Evil Empire" speech - another strategic move to "win" the Cold war when others had counseled maintaining the stalemate. In both cases, progress will be measured in decades rather than years - kinda like Western and Eastern Europe, Japan, and Korea.

A lot of people disagree with the political decisions made, not seeing the payoff and certainly not condoning the lousy execution. That truly is Bush's fault for not adequately explaining his actions and going in light. However, comparing the credit meltdown with Iraq is apples and oranges.

[Mark in SBA]

Not trying to be argumentative, just describing the "other side's" logic.

One's a national strategic program, the other is the search for a larger plasma screen TV and 6,500 mini-mansion.

[m8powr]

i second your explanation.

thanks Mark.

[m8powr]

-Cort (San Diego, CA)
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380k miles on stock 350ci and still going...



That was on-topic, right?

[ladislav]

Greenspan knew exactly what he was doing.

There's a saying in banking: "If you owe someone money you're in trouble. If you owe someone a lot of money, they're in trouble."

So - at this point it's the Fed who's lent money to the failing banks who's holding the bag and is in trouble and not the US Treasury, i.e. not you and me. If the so called rescue is allowed, it will be the US Treasury who's holding the bag, i.e. worthless assets. I think Messrs. Greenspan, Bernanke and Paulson are confident that they can get the herd of idiots in Washington drink their Cool Aid. Bush is just a puppet, he's had this 'plan' ready for a long time but did nothing to avert 'the crisis'. Now he's like a used car salesman threateming us that this deal is time limited.

If it passes, the US dollar will go way deeper into the ****ter and it will be a joke vs other currencies. You won't be able to buy a Chinese kite with one.

It is history repeating itself. Remember the Continental Bank scandal in the early days of the nation?

There is a real nice explanation of this mess at http://ronpaul.com. Suggested reading for everyone.

[stuartyp]

They're only going to make it worse.

The problem was created intentionally by the Federal Reserve when they artifically lowered interest rates to below zero (when you include inflation,....inflation at 6-8% and interest rates at 3% or so,...which means phoney money out of thin air, being loaned at -3 to -5%).

This causes a housing bubble with lots of new morgtages that the free market would not have permitted. New crazy morgtages (adjustable arms, interest only, no-qual, etc) that swelled the housing market and allowed people who would have never qualified for a home loan to buy houses they would never be able to afford.

The proposed solution is more of the same. Dump even more phoney money out of thin air into the market. The result is delaying the disaster for a short time, and making it much bigger when it happens.


The best solution is to let it crash. It's happened before,..and everything will re-adjust and we will recover. And for a generation at least,..the people will be wiser. Happened in 1921 and the economy recovered in less than a year.


The proposal is also blatant robbery. I like others here have savings. Printing tens or hundreds of billions in phoney money and dumping it into the economy devalues my savings. It is the same as holding a gun to my back and taking my wallet.

The Fed and Congress MUST be put in prison for what they are doing. And wheat the Fed and the president are doing can easilly be called treason (intentionally destroying the U.S. economy. I believe the punishment for that is still death no?).

[stuartyp]

I think you've drank the cool-aid.

We have no intelntion of "spreading democracy". How could we? We've never been one ourselves. And event he representative-democracy we once were is no longer in existance.

The ideal solution for Iraq wold be to have Sedam back. Some call him a thug,...but what do you suppose it takes to keep the peace in an arab nation with 9+ factions, all of which want to kill the others? Sedam managed it,..but our army and all the billions can't. Do you suppose we look more or less like thugs over there? I mean we ride around armed to the teeth in tanks and other armored vehicles getting into daily fire fights. Missles and machine gun fire are constant occurances. Not exactly Martha Stewart.


We actually went to Iraq to pull off the biggest robbery in world history. Happened a year or so ago. We essentially stole 31 trillion dollars worth of oil. The puppet government and congress were working on drafting a new "oil law" for Iraq, to make 2/3's or so of Iraqs' oil open to foreign control (instead of 100% control by Iraq).

Our government has no interest in democracy,..especially here at home. Any politician stating anything like that is flat out lying. There's no money in it.

[Walte]

the need to put in a "time line" to abolish the Federal reserve bank (a privately held corporation)and have the U.S. government print and be responsible for its own currency. maybe tied to a silver or gold standard or some other internationally accepted standard.
At least they can then pay down and get rid of the the national debt and future debt with 0 interest loans to themselves. 8^)

along with a "time line" to get rid of fractional reserve banking and go to a full reserve banking system , should stop this from happening again.

They can still leave wall street leveraging up to the private companies in the biz. with 1 exception - that all privately invested/held money in accounts , should be insured infull and held in trust- not be used as a borrowing slush fund or lost when the company goes under.

Just an opinon.
Walt

[ladislav]

even if we all tossed our ethical standards - where do you think they'd all get the money? So, what are they going to do - just stay underground.

All agencies should intercept them at every opportunity and toss them over the border where they belong and keep them out. Laws are on the books to prosecute people and corporations that employ them illegally. Enforce them.

Why do immigrants that have not worked a single hour in these US (I personally know of such examples) receive social security, medicare and the like? Why are hospitals taking care of them with you and I footing the bill? Why are they being issued driving documents?

The people who advocate these benefits for illegals should be forced to pay for them personally, not the public at large. No wonder the illegals run for the US no matter the risk. They can't believe the freebies.

It's like going to lunch with a group of people and splitting the bill despite the fact that many had a burger and coke and the others fillet mignon and a bunch of overpriced drinks. It's usually the spenders that insist on the split. Let them pay their own way and divide the expenses properly.

[Walte]

I was surprised to even find it online, after all these years.
a pretty good video iirc. (long @3.5hrs) but atleast it explains the basic principles.


The Money Masters

Walt

[stuartyp]

Or we can just forgive the debt. After all,..it is owed TO US,...not by us.

The Federal reserve will have you believe that we owe THEM money when in fact it is the other way around.

If the Fed was lending us their gold,..that they earned,...then we would in fact owe them. But that is not what happened.

They printed currency (not money,..not value,..just paper and nombers) out of thin air. In fact most isn't even printed,...it's just typed into a cumputer keyboard somewhere. Morgtages get made,..checks get written,..and cash isn't even printed for 90% of the money supply. (Imagine you had the power to just type yourself unlimited amounts of money? I think I'll give myself 10 million today and head down to the Bugatti dealer.

Now this non-value currency gets spent into the economy and lent by the bankers who gave up nothing real for it. They are not "out" anything. By that I mean,..(as an example),...you lend me your car,...you have taken a risk,..and I have recieved real value. You worked hard for your car and don't want it stolen or wrecked. You also don't have use of it while I have it. You have made a loan of something with real value.

The Fed just types zeros into a keyboard and they are out nothing.

And doing that deflates the rest of the currency and everyones' savings. Essentially they have borrowed into the economy MY MONEY. And THEY are recieving the interest for it. They got the benefit from picking my pocket. The fact is,..they owe ME money,..not the other way around.


When someone asks who we owe the national debt to,....the answer is, "The Owners of the Federal Reserve Bank owe it to us".

So at our option,..we could just forgive it. Better yet,..we should seize all the assets of the Federal Reserve Banks, and the assets of all of its' owners,..and forgive the ballance.

Let Congress print money like the Constitution say only it can,....gold standard etc. The nation will be back on top in a couple years.

[Mark in SBA]

I'll paraphrase the consensus:

"The U.S. family has been living beyond its means for the past 10 years and using debt to stave off the inevitable cutbacks needed to match spending with the lack of income growth."

American's entitlement attitude extended into imaginary standards of living that had no basis in fact. American citizens have lost control of their lives and succumbed to instant gratification fueled by a consumerist economic policy. American families are now technically insolvent and unable to repay their debt.

As Pogo correctly states, "YEP, SON, WE HAVE MET THE ENEMY AND HE IS US."

[justaguyinokc]

I work in the finance and investment industry. This "crisis" has been perpetrated by ALL PARTIES. Anyone that tries to assert that any one party is more responsible than the other reciprocal parties has a biased and shallow view of the problem (and quoting someone as shallow and ignorant as Ron Paul really won't help much).

Oh, and for anyone suggesting that we should just let the banking industry and credit markets self-regulate through collapse is like your doctor telling you that you can cure that toe infection by just letting your leg rot off.