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A Better Solution Than Bailouts
Sep 24th, 2008 | 6 responses
Paulson and Bernanke would have us believe that there’s no alternative to giving banks $700 billion in public funds. That unless we do so, individuals and businesses will be starved of needed cash.
But in fact there is a much better solution to our current financial crisis. One that gets money directly to the people who need it, people who will use it for the right purposes, and not to banks that will probably use government bailout money to pretty up their own books, pay for takeovers, or invest overseas.
The much better solution is to suspend the Social Security Tax for one year, and pay Social Security benefits with the same $700 billion that would otherwise be given to incompetent and greedy deal makers on Wall Street.
Suspending this tax would put another six percent into the pockets of every working American–$2,400 a year for people making $40,000 annually. Because only people now paying this tax (those with incomes of less than $97,000) would get this money, almost all of it would be spent, giving a far larger and longer-lasting jolt than the recent $600 gift from Washington. A lot of people would also be be better able to pay their present mortgage or qualify for a new one, helping pull us out of the housing crisis.
And there’s more. Employers also pay this 6 percent Social Security Tax. Their own books would be radically boosted by this temporary suspension. They would be able to hire more workers. Fewer store fronts would be empty.
This is not socialism. This is modern capitalism at its best. What this approach does is eliminate the middlemen. The banks. It thus gives money directly to where its needed without a huge rake-off.
Enough of trickle down. Direct payments to the end money users. Bail out the people, not the banks!
6 Responses to “A Better Solution Than Bailouts”
And a chicken in every pot!
Honestly, you expect politicians to be peddling this stuff but it's a shame that we have armchair economists on blogs now too.
Interesting idea, but would this help the credit crunch at all?
No different than the fuel tax suspension, which was rightly decried as the gimmick it was, _too_.
“And a chicken in every pot!”
More like a “free” [sic] house for those who took on mortgages they couldn't afford due to incompetence or to greed. That's what “relief to homeowners” is about — to those whose votes can be bought because they're so willingly and openly for sale!
“His political commentary has run in scores of high profile publications including The Wall Street Journal, New York Times, Atlanta Constitution, Chicago Tribune, et. al. Silverstein honed has knowledge of financial markets as a senior editor with Bloomberg Financial News in Princeton.”
This is absolutely breathtaking.
Normally, you would need a room full of Harvard-trained economists led by Noam Chomsky to come up with a plan of this nature.
FYI, Chomsky is a linguist at MIT. But I realize you are just making fun of academics, which Silverstein is not…. unless the academics agree with you and then they're brilliant.