Thoughts on the Bailout
You know, I heard someone make a suggestion not long ago that went into my brain and skittered around, finally coming up to the surface yesterday, I guess it was.
I should tell you something about my past week. I've had some personal things come up that kept me from thinking too much about other things. My personal life is set on simmer right now. I've done what I can do for the time being, now other people have to give me input so I can proceed. That's why this suggestion, that was made sometime since the bailout was announced just finally came to the surface of my poor, overstressed brain.
The government apparently has access to some $700 Billion (that's billion - with a "b") that Hank Paulson is going to use to shore up the economy. Now, let's not even get into why the economy is about the fall apart. That's yet another question for another time.
The suggestion was, instead of giving that money to the banks (and other companies and states wanting handouts), give a million to every person in the country. Talk about a stimulus package! The government could even "loan" it to the public at a minimal interest rate, say whatever the current interest rate that the banks would pay (what? 1%?)
The people who are in trouble over mortgage foreclosures could pay off their in-danger loans, and purchase another house mortgage free. That's what I would do. Pay off my current mortgage, do the remodeling I want to do, and then either sell or rent out. With the remainder of the one mill, I could pay off all my debt, buy another condo, car, shore up my retirement funds, and invest the rest in a business or other investments that would further finance my future retirement.
If everyone did that, business would flourish, the economy would take off like a rocket!
Now, one of the first things I thought about when this finally filtered through the ooze that has been my brain lately, was the math. Now, if I am right, multiplying 350m (people) by $1m would be $350 trillion. That's something more than $700 billion. Okay, if my math is correct, that won't work.
How about this? $1m to the taxpayers? Paid out like the stimulus checks, to the people who filed an income tax check. That might be more doable. Right now, I'm not sure how many stimulus checks went out. But wait. What about those who didn't file an income tax check. Would it be fair to give a million to everyone who got a stimulus check?
If the math still won't work, how about cutting the amount down to, oh, say, a half a mil? A quarter? How about just giving it to people who are in danger of losing their homes to foreclosure? That would surely cut down the amount of the bailout. Or how about enough to bring the mortgages current?
I don't know what the answer is. That's for people who are way smarter than I am.
Let's go back to my original premise of giving $1m to everybody. Here's what some people would do:
I wonder what that sudden influx of money would do to the economy. Would it boost it, or artificially inflate it until the money was spent and then the economy would fall apart?
- Some would pay off their debts, and invest the remainder for the future.
- Some would pay off their debts, invest some, and live it up on the rest.
- Some would "spread the wealth" around their friends and family. Why, I'm not sure because everyone would have the same amount to spend.
- Some would spend it recklessly on anything and everything.
Would someone like to give their two cents on the subject?