Posted on 09/24/2008 12:55:11 AM PDT by y2gordo
My proposal is to immediately slash payroll and income taxes by 20% across the board, effective today. For someone in my income bracket, that's an extra $100/mo to put towards a credit card. For those just higher than my bracket, that's an extra $200/mo ($3600/yr) to put towards their mortgages. There still would be people defaulting on home loans, but immediately you would see fewer people doing so, and liquidity is immediately added to the credit market.
Based on $2 trillion in federal income taxes collected annually, a 20% reduction would add as much as $30 billion per month to the credit market. That is less than what is claimed is needed, however, this would be real debt repayment, not putting if off for another generation. That would restore confidence in the market, the primary reason given by people like Paulson for pushing this "bailout". There may still be a “bailout” needed in the future, but the money and the confidence added would delay the abyss for long enough to structure the bailout correctly (i.e. without nationalizing the home loan industry) and would reduce the amount of money involved.
Additionally, cutting payroll taxes would reduce personnel costs for both small and large businesses. That would both keep Americans employed and reduce prices for everybody. Now people’s normal income goes further, and with the $200, even more debt repayment can take place. Companies also show higher profit margins, and confidence is restored in our markets.
A recession will still hit as financial institutions restructure themselves, but cutting payroll taxes will help small businesses stay afloat while that correction takes place. Some people still lose their jobs, and unemployment will go up but not as dramatically. For more people it's a "recession" rather than a "depression", and you avoid a crisis of confidence in the American capitalist system, such as happened in the 1930s. Furthermore, coming out of the downturn, we’ll be healthier because we actually paid off debt rather than simply redefined it. That will help restore the world’s confidence in our economy and our currency.
For all the people who gripe about how are we going to pay for it, we've got the $700 billion “bailout” to ask about how they were planning to pay for that. The deficit will go up, but our overall debt is already astronomical to the point where we can't deal with it right now. It will not make that much of a difference in the long run if we add another trillion to it to get through this mess, especially since we are already going to add another trillion to it anyway. Put the power to solve the crisis in the hands of the American people, and they’ll respond. Let the American people do it on our own with our own money that we earn showing up for work every day. We can tackle the national debt once we rebound into a classic American-style economic boom. That restores a generational confidence in capitalism.
Paulson wants something done now, and I'd rather not give the government control over the mortgage industry simply out of fear. We are rushing headlong into dangerous territory, and this bailout plan is scary and is worth fighting against. 20% across the board cut in payroll and income taxes effective TODAY. That is the solution our conservative philosophy teaches us, and in times of our most desperate need we need to have the confidence in the teachings we all know to be true.
We raised our voices in August, and the House Republicans responded. Let's raise our voices again. Get them to stand up, go against the "bailout" plan and be vocal about why an immediate tax cut is the better solution. Let the Democrats counter with "tax cuts for the rich", and then explain $200/mo in terms of a credit card payment or partial mortgage payment to the people who tend to buy that line, especially college kids.
Like with gas prices, dealing with credit card bills and mortgages is something nearly every single American has to deal with, and not being able to pay them off is embarrassing to all but a few. Unlike a one-time “stimulus package,” the $200/mo is perpetual. With each successive month, those who use the money to pay down debt see their interest charges decrease, and the $200 pays down even more debt next month. You give people assistance in paying off debt by taking less of their money to begin with, and you lift that stress from people's lives, and they start restoring confidence in themselves.
Like energy independence, this can be another national "private sector moon shot" initiative, and we need the help of our Representatives to get this started. If not now, then in the future, but we all know the bailout will fail. The only thing that can fix this mess is the collective work and spirit of the American people driving the American economy. We fix this ourselves, prove to the world that you can escape total economic disaster through conservative, small government principles, and the world restores its confidence in the philosophies of free market economics and conservatism. This is America. We need to show the rest of the world how to get out of a mess like this, not take their advice.
Call your congressman. Call your Senator. Send them e-mails. Send them letters. Encourage your friends to do so. The bailout will eventually fail, and we need to find a better solution before it is too late.
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I like your thoughts and would like to see them implemented, but our current economic crisis is far larger than that. We're talking trillions and trillions of dollars (at least 2 and realistically much more). The bailout plan won't work and should be voted down - but it won't be.
I say let the investors take the hit. Its their risk capital. Why should we cover any of it? In other words do nothing and let the system collapse. Americans needs to wake up and realize that the private bankers have sold us a bill of goods.
Cut or eliminate as many taxes as we possibly can. In addition to cutting the income and payroll taxes, cut the corporate taxes. Eliminate the capital gains and death taxes. Suspend federal gasoline and excise taxes and fees. Cut the spending. Provide incentives to expand business. Dump the ban on oil drilling. Allow or step up the building of refineries, nuclear plants, coal burning plants, etc. Pump that $700 billion per year back into our own economy. Free the restrictions on business and our individual freedoms, put our people back to work and let us compete for our place in our own and on the world markets. Let freedom ring and the free markets reign! Turn our people loose!
We wouldn’t be covering any of it through anything more than paying our individual debts. You still let the financial institutions that need to fail do so, but you don’t bail everyone out en masse because that doesn’t solve the problem. You just add another layer of interest to what wouldn’t even be a problem if people were able to pay their mortgages off.
Keep in mind. It is not the dollar value of the mortgages that is the problem; it is the fact that people can’t pay those back. Plenty will still default, but if you can reduce the number of defaults, then you limit the damage to the overall economy.
Jim, I do hope that you’re sharing these blindingly workable solutions with your Congressional reps. I’m going to be on the phone tomorrow to mine, to stress the very same ideas.
I tend to agree with your thoughts on this... I’d rather be dirt poor and still relatively free, than see our government go even further down the road to nationalization of corporations and industries (i.e. Socialist - where everyone except the leaders are dirt poor ANYWAY, but without FREEDOM to make things better!).
I have a distinct fear that if this “bailout” goes through the Socialists in Washington will see it as a green light to nationalize other industries on some notion of “preventing” these problems (or any “problem” they decide is “bad” for the public) in the future. Especially with the Dems calling for salary caps on CEOs and such as part of the bailout/takeover plans!
It’s what people were trying to warn about right after 9/11 when they bailed out the Airlines. They should’ve let those companies fail then, and they should let these people “eat it” now... All JMHO - and now, I’m by no means an economist. However, it reminds me of parenting - at some point people have to suffer the consequences of their actions. The government can’t solve problems like this, and gov’t intervention 99.9% of the time only makes the problems WORSE!
You can bet that they will immediately nationalize the oil, gas and energy industies and the health care industry. They’re just chomping on the bit to seize big oil’s profits and introduce universal health care. If Obama wins the presidency and the Democrats hold the majorities in congress, it’s all over. They’ll also decimate our army, scrap the navy, scrap our nuclear defenses, throw open our borders, sign onto ever global treaty that comes down the pike, raise our taxes, seize our guns *or try to* and generally destroy our freedoms and our republic.
Oh, yeah, they’ll also obviously nationalize the transportation systems. Central planning will insist our cities are laid out where all people can use public transportation to travel to work. Eventually, they will assign your work place and living quarters. And seeing as how the world is overcrowded, you’ll have to apply for permission to have your one child. Old people will have a patriotic duty to die. Christianity will be outlawed as a hate crime.
Thanks Jim, that was right on the money. It’s exactly what I’m afraid of right now. And, I don’t think people really realize how close this is to happening for REAL. So many people falsely think “it could never happen here in the US”. But that is EXACTLY what the DNC, and their communist/socialist supporters, agitators, and activists have been working towards for a LONG, LONG time now.
Cancel all debt. Make it the year of Jubilee.
Yep... it sounds like something out of a movie, but it’s SO close to happening. And, perhaps the scariest thing about all of this is that there are approx. 40% of Americans (71% of Obama Supporters) that DON’T believe the Supreme Court should base rulings on the written Constitution, but instead out of some “sense of fairness”. If that’s what close to 50% of Americans really believe, then I doubt they would even complain about any of this! At least not until it was WAY too late... (Stats taken from a Sept. 5 Rasmussen Poll about the Supreme Court)
I really fear for what the future holds for my children (and, God willing, any Grandchildren I may be blessed with in the future).
Preach on, Brother Jim!
I believe we’ve got the people in the House that can start pushing this forward. This whole mess is making people realize that something isn’t working. We need to show them that liberalism is the problem, but we need to lead people in the direction of conservatism.
And you’re right, everything that is America as we know it is at stake here.
You would hear such a cry of freedom from across the land.
That's why they can't do it. Imagine trying to take back that 20%...Washington would burn.
* big smile *
As great as a tax cut sounds, there is no government “solution” to this problem. One can’t board the Titanic to save it. Nothing, absolutely nothing in creation is “too big to fail” not even the US government.
When they make you king, that might be a workable solution, but there are these pesky elections, and those "Americans" you want to "wake up" may not share your desire to let the "system" collapse on their heads. Compute the odds that the Democrats and their Media allies won't be able to turn the Democrat chicken sh*t that brought about this situation into Obama's Victory Chicken Salad if we "do nothing" and the market goes bust before election day (which is almost a certainty given the climate of paranoia that rules Wall Street). Too many Americans have already accepted the DNC and Bill O'Reilly "truth" that the bankers have "sold us out", but if there is an economic collapse their reaction to that "fact" will not be to reinvigorate the free enterprise system; they will instead choose a D.C.-based command economy, with Democrats running the show.
I hope the GOP can quickly come up with a workable alternative to Paulson's proposal that will take the country by storm, but guy's like Jim Bunning need to realize that by the time all the media circus hearings have been conducted, all the Democrat bills have been run through the appropriate committees and all the GOP amendments have been voted down, the economy will be in the toilet, and Michelle Obama will be deciding what type of furnishings will match the new paint job on the Black, Yellow and Green House.
Well, lets get the people off. Money is worthless unless people trust it. Prosecute fraud, liquidate assets equitably, deleverage the survivors.
Yet they did.
Even if we ignore Egypt, Greece, Carthage, Rome, the Ottomans, etc etc etc ....and even if we ignore the fact that less than a century ago the Britain was TRULY Great Britain, it is just a couple of decades now that the USSR simply went belly up. Every great civilization or 'empire' has specific trigger points, and if those are hit in the right order it will either fragment or it will implode. Nothing is too big to fail, and that is something that millions never think of when they lay their balding heads to sleep at night.
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