A meandering blog with no clear topic. You will find me talking about knitting, building, kids, social and economic issues, Alaska, and lots of other stuff.

Monday, October 20, 2008

My economic stimulus plan

OK, so the title may be a little bit grandiose, but to be perfectly honest, I think they have it all wrong. They being the know-it-alls in Washington that have come up with one harebrained scheme after another to waste citizens' money. They keep saying taxpayers, but I am damn sick and tired of being called a taxpayer or a consumer. Anyway, this is what I think they should do:

1. Bring the soldiers home from Iraq and Afghanistan. We are spending hundreds of billions of dollars to keep them overseas. We can put that money to better use.

2. Repeal TARP, the $700 billion bandaid for the credit crisis. I have a couple of reasons for this. First, I don't think it will work. There is a lot more than $700 billion in bad paper out there, and once we start, where do we end? There was one bank that said it had over $300 billion all by itself. Secondly, the vast majority of citizens are against the plan, and I think we count a lot more than all the Wall Street corporations put together.

3. If a bank lent money it should not have, or an insurance company insured loans they should not have, or an investment firm made bad bets, they need to take their losses. If I were to invest money in the stock market, and lose it, or to lend money to someone and not get it back, there would not be any government agency standing by to hand me my money back. It should not work for them either.

4. Instead of this new economic stimulus package they are talking about, which is just another attempt at a quick fix, a get-rich-quick scheme on a national level, we should be investing that money in a way that will pay off in the future. Think New Deal. Invest in fixing the electrical grid that is old and worn out and in danger of a major collapse. Invest in alternative energy projects that will help reduce our reliance on oil. Get the railroads back in good condition, as shipping freight by rail is much more efficient than by truck. Get the CCC reactivated for these things. Not only will these things help us in the future, but using something like the CCC will create jobs. Unemployment is relatively high right now, and this type of program would help lower it, and thereby put more money in people's pockets. Slower than sending out a check to everyone, but more effective in the long run.

5. Institute a foreclosure moratorium for families who just had their rates readjusted or are newly unemployed. There should be some guidelines about this, so people that just decide to quit paying their mortgages because they are underwater don't get bailed out, and so that people can't just pay nothing and live there for free. Put in place rules for renegotiating their mortgages so that it is a uniform process.

6. Encourage victory gardens and local food production. Food prices are rising, more people are applying for food stamps, food banks are used to capacity and more. The cost of transporting food across the country is astronomical, and wasteful. For things like olive oil, that can only be produced in certain areas, fine. But Alaskans should not be buying potatoes from Idaho.

7. Create MAJOR incentives for increasing energy effciency. Things like carpooling, using public transportation, switching to higher mpg vehicles. We can save energy in other areas besides transportation too. The better insulated a house is, the less energy it takes to keep it warm/cool. Individual families that make plenty of money may not find this important, but as a nation, it is essential that we use less.

8. Create MAJOR incentives for making things here in the US. Almost everything I buy these days says it is made in China, Indonesia, somewhere besides the US. That needs to change.

I am sure I can think of other things, but this, to me, is a good start. I think it would help get us pointed in the right direction, away from the mentality that the only things that keeps the economy going are consumer spending and banks lending to each other.

2 comments:

Verde said...

OK, I'm game! I think you have a very good plan and not one that benefits making the rich richer, but is based on a real free economy and makes a difference to real people

Anonymous said...

Point 4 - The CCC. I am with you there and have been since before you where born.

Point 5 - Reducing foreclosure. The FHA has already proposed a plan where if the banks choose to participate the mortagage will get reduced to 90% of the appraised value and replaced with a 30 fixed rate mortgage that is guarenteed by the FHA. The kicker? When the owner sells the home they have to pay the FHA any amount forgiven plus 1/2 of any increase above that. This only mitigates the banks loss. If I owned the bank I would implement a similar policy, but instead of the loan being insured the bank shares in the potential profit.

Points 7 and 8. There are already a lot of tax credits that are available for energy efficient products and for increaseing domestic production. On energy, people are just not taking advantage of it. On domestic prodution, with our unskilled labor rates being so high above the rest of the world the tax credit is not enough to compensate. So if we are going to compete we need a more intelligent well trained labor pool. This is not going to happen with a "No child left behind" mentality.

Love, Mom