brni (brni) wrote,

i don't even play one on TV

I'm not an economist. I've never taken an economics class or a business class or any of that kind of stuff, wherein they teach all about how this stuff works. But I keep feeling that I'm missing something.

They are pushing through a stimulus package to fend off or drag us out of recession. If I understand correctly, this stimulus package essentially does the following:

  • tax rebates:
    • $600 for individuals earning less than $75k
    • $1200 for families earning less than $150k
    • $300 for each dependent child

  • "tax rebates" - $300 to each poor person or family
  • tax incentives for businesses
  • fast-tracked tax writeoffs for investment for businesses

The plan, as I understand it, is to get citizens consumers to go shopping, and that by shopping, we give $$ to businesses, and some of that trickles back down to the people who need it by creating more minimum wage retail jobs.

Now, I don't mind getting a $1200 check from the gubmint, but I have some questions.

The crisis we're in, as I understand it, stems from the following:

  1. The subprime mortgage crisis.
  2. The cost of gasoline skyrocketing due to instability in the Middle East.
  3. The weak dollar, due in large part to out of control deficit spending and an overwhelming national debt burden.
  4. The cost of alleged health care system.
  5. The ever-increasing personal debt load for individuals, making people more vulnerable to bankruptcy

And it seems to me that this economic stimulus package may transfer enough wealth around to fend off a recession, but not only does a large portion of it end up in the pockets of the wealthy or get shipped overseas to the manufacturers of the products that our citizens consumers purchase, it also does NOTHING to actually address any of the causes of the crisis.

Me receiving a $1200 check does not help out the guy who got suckered into a bad loan from losing his house, and it doesn't help the bank out that suddenly has a house on it's hands that it can't sell. Nor does it help get national spending under control, or strengthen the dollar on the world market. Nor does it help people and businesses get out from under the crushing burden of health insurance. It doesn't do anything about the cost of energy. The only thing it might do is decrease my personal debt, but if we all do that, then we're not spending our way out of recession, are we?

Seems to me that we need our economic stimulus package to do the following:

First: Address the housing crisis. Help people who are about to lose their homes to keep them. Make the banks who allowed this to happen hurt, but ensure that they remain solvent. Restructure the rules so that this doesn't happen again. The mortgage brokers who created this problem need to be appropriately tarred & feathered. The casual buying and selling of loans needs to be curtailed - this allows people to make loans and not deal with the consequences of the deal. Furthermore, there needs to be an antagonistic relationship between mortgage people and real-estate people. Real estate people need a house to sell for as much as possible - their commission depends on it. Mortgage people should be encouraging people to only take out loans that they can afford. When the mortgage agent has his office inside the real estate company's offices, you know that they are too much in bed together to service the customer wisely. There's got to be a correction in the housing market - it costs too damn much to buy a house - but that correction needs to be controlled, or a lot of people will lose everything and the economy will go into the shitter.

Second: Start sinking a ton of money into alternative energy sources, and into high-efficiency products. Break the dependence on oil, but also start getting people to understand the value of consuming less energy. Promote progressive energy bills (first N watts at $X/watt, next N watts for $Y/watt (where Y>X), etc.). Provide tax breaks or real rebates for people to make their homes and businesses more energy efficient - insulation, better windows, solar panels on the roof, etc. In high density areas, work on building up public transit so that it is a viable and attractive option. Do everything possible to get people using Amtrak for inter-city travel, particularly in the northeast corridor. This means dropping costs dramatically, so that it becomes as cheap as and more convenient than driving.

Third: reinvigorate the shipping and rail systems for goods delivery, and rely less on air and trucks for long haul shipping.

Fourth: End the fucking war. Stop leaking lives and money.

Fifth: Balance the budget. Any money spent in excess of revenue needs to have very specific goals within specific timetables for rectifying specific problems (see above).

Sixth: Remove the employer from the health care equation. There is no logical or reasonable reason why the employer should be responsible for the employee's (or employee's spouse & children's) health care.

Seventh: Eliminate the insurance companies from the health care business. They have an inherent conflict of interest with health care - to make money, they need to extract as much as possible from the citizens consumers, and pay for as little health care as possible. Replace the insurance companies with a non-profit health expense redistribution system. I don't care if it is the government that runs it, or if it is independent of the government. But it needs to be a real non-profit whose job is to create a healthy populace.

Eighth: Encourage savings. Discourage consumerism. Make credit more difficult to get, and make paying it back quicker a higher priority. We've been building a house of cards by propping the economy up with ever-increasing consumerism. This will collapse. There will be millions of personal bankruptcies. This will create a massive banking and credit crisis, which will then lead to massive closures and cutbacks in businesses. The companies who make the loans make their money from the interest on the existing debt. It is in their short (and medium) term interest to maximize the amount of unpaid debt that every citizen consumer has, up to the very brink of bankruptcy. But in the end, it will only take a small puff of wind to blow the whole thing down.

Ninth: Extend unemployment benefits where they are needed, but within limits - at a certain point, cut over to point Ten below:

Tenth: If things start looking bad, start up work programs such as we saw in the New Deal - pay people to do the necessary infrastructure work that isn't getting done - cleaning the streets, getting rid of derelict buildings, building bridges and parks and such.
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