Solving the Economic Crisis:
I must have seen about a dozen ideas put forward on how to handle the current economic ‘difficulties’. (I personally think it is going to eventually be a total collapse, but that’s another story.)
Some of these ideas call for tearing down the present system and installing a socialist system. These don’t bear serious consideration in light of the near collapse of socialism worldwide.
The government has, as is to be expected, some ideas of its own. Every one of these ideas both from citizens and from government has one thing in common….
Putting large sums of taxpayers’ money into some portion or another of the economy.
Some call for more ‘bailout’ for failing financial institutions. Some call for ‘bailout’ of companies that provide large numbers of jobs. Some call for government to spend huge sums of money on refurbishing the physical infrastructure of the nation. This, it is said will provide employment for many who are already, or are about to become, unemployed.
Now all of these great, and not so great, ideas show a clear understanding that, whatever will or can be done, it will entail a huge expenditure of taxpayers money. I read a news item the other day, I forget where it was, where someone estimated that the amount of money needed would be on the order of many thousands of dollars per capita – MANY thousands. (I think the sum mentioned was over $10,000 for each and every adult person.)
It is thought, that by investing in such “bailout of the wealthy” schemes, employment will be created and money will be “earned and spent” thus keeping businesses in business and our economy alive. Perhaps this is true, perhaps not. I’ve never seen trickle-down economics work yet.
In all of these ideas about saving the economy runs one common thread. A whole bunch of money must be spent and the arguments as to which businesses should get that money are endless and as varied and ingenuous as you could want.
Proponents for each sector of business and government are each certain that he is right and that the proponents for any other sector are completely wrong. Each claims that his own special interest will ultimately get the most money “into the hands of the population so that spending can revive the economy”.
I think they are all wrong. They are all thinking “trickle down” economics of a sort. What...”Give money to businesses so they can hire people who will earn a pay-check who will spend (maybe) that pay-check which will make businesses prosper and hire more people, etc., etc.?”
Whoa.......Hold on there podna’!
If you need to get people spending so as to revive the economy – why not just give THEM the doggone money? Directly? They are going to be on the hook for paying it back so why shouldn’t they be the ones to get it?. . . ALL of it.
Why filter it down through government agencies or businesses that have proven unsuccessful at managing themselves, or indeed, through ANY intermediary? Such filtering will mean that only a small portion of that money will get to those who must spend it to make the economy come back to life, the citizens.
So here’s a thought….. Let us, instead of bailing out undeserving financial and corporate interests, “bail out” the citizens! Suppose that each adult citizen were “bailed out” to the tune of $10,000.
If it is given to each and every adult citizen, he/she would be able to spend a bunch on things they need or want. This will create a huge demand for goods and services of all kinds. With the huge demand for goods and services this would create, businesses will prosper - employment will skyrocket - more spending will occur - more businesses will pull out of the slump - more people get hired. Round and round we go. The downward spiral becomes an upward spiral once again.
Recovery complete.
And in a fraction of the time it would take by any other method, IF any of those other methods would even do the job at all.
Sometimes the simple solution is the best one.
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Sally Swift
patricia kenet
Global Rev
SeventhSister
Ralph Tingey
TimingLogic
Salon.com
Comments
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And you, too, Sky!
:)
This is so beautiful. Thank you. You've just made my whole week with your good news.
R
Naw, it's FAR better for the economy that those corporations get tax breaks and pay less than their normal share of taxes so that they can move more manufacturing facilities and jobs overseas, and pay hundreds of millions of dollars to high-level managers for their "well deserved" profit performance.
Thankee kindly ma'am......
(*Blushes and digs toe in the dirt*)
Gary,
That article was written and published 3 years ago. I'm afraid to tell you where I am now with these 'outside-the-box' ideas!
jmac,
Even if the money were used to pay down debt, you know as well as I do that the first thing 90% of the population does when their debt is reduced, is go out and bring it right back up again.
This would get the very poor completely out of debt AND OFF SOCIAL ASSISTANCE for a time (Imagine the savings from that!), and give many of them the funds needed to get their health back up to par. It would even give a lot of people the funds to start up their own small businesses. Think of the benefits that would bring!
Gary,
Even the super rich couldn't bitch about this. Look at how much money they'd make from sales of their products or services! And it would continue for some time as people got back to work and earning a 'disposable' income!
The extra revenues from citizen income taxes alone would mean that the tax breaks the rich get would no longer harm our society. Heck, even the bankers would love it; people aren't going to walk around with that money in their pockets - they'll bank it - and the bankers will profit from those deposits as they always do.
scanner,
Our form of capitalism ought to die. BUT 'capitalism' itself comes in many forms. We might consider altering the form we now use, establish firm controls of it, and using it as a tool to enhance our over-all standard of living. This is what an economic system is supposed to be and do. It is NOT, as is the case now, supposed to take over the social system that we have devised for our benefit.
The issue of food stamps is entirely different. That is an on-going process where stamps are dribbled out monthly. This is a one-time refurbishing of the economy to get us out of a slump. This would not be open to much (if any) corruption because it would not be an ongoing thing.
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That said, I'd rather it went to them than the corporate welfare bums.
If your experience is similar to mine, what we saw was what happens when a large lump of cash falls into the hands of only a very, very few individuals who live in a society that does not get that kind of money. They, as is perhaps natural, think of themselves as 'special' and 'entitled' to be treated as such. When all have that money at the same time, this might be considerably alleviated.
We, in this society, place so much value on financial status that a great many people who now think of themselves ( and are thought of by society) as 'worthless', would again have the psychological boost needed for them to feel 'as good as anybody'; I cannot think of that as a bad thing.
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Great idea sky, and I that was a great TED talk. There's a reason they say we have a consumer driven economy. What a bunch of idiots we have running the show.
Rated.
Weeeeell...... I hadn't thought of it in terms of prune juice but, since you mention it........(*giggle*) !
I have often wondered why it is that those who pay so much homage to the production side of things always seem to forget the other half of that equation. It's production AND consumption! Neither can stand alone. We tend to revile those in our society who are not engaged in the 'production' side (includes services and investment) while forgetting that their role as consumers helps to keep our economy balanced. In fact it is not 'consumers' who unbalance the economy by over-consuming - it is gross profiteering and greed that throws sand in the works.
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As Richard Wolff describes so eloquently, the corporations love recessions because it allows them to enforce wage discipline. With millions of people unemployment, those who still have jobs readily agree to wage and benefit cuts, as well as speed-ups and cutting corners on health and safety. As Wolff explains, during recessions corporate boards sit on their profits (or pay them out in CEO bonuses), instead of investing them in expansion and job creation. As more and more people get laid off, wages drop lower and lower. We see this in all the tech support jobs returning to the US from India - after a long period of unemployment, many US workers are more than happy to accept third world wages.
As wages drop, companies' profits increase. When they get high enough, corporations start investing in expansion and jobs again - and, voila, the recession is over.
Great post, Sky!
r./
He says customers create jobs. Really? What if we all sat our lazy asses and waited for someone to a business so we can be both employees and customers.
Thus those who have the desire to risk stating a business, running it, managing employees and all the crap that goes with it, create jobs.
I have never created a job other than employ a lawn person or a home cleaner. Yet this person wants me to be pissed off at the rich people that employee me.
The guy that opened the BBQ shop in my neighborhood 25 years ago makes a living at it. He is not rich but he has created a handful of jobs. Good for him. Now his employees can be customers to other people who have started a business. I have never taken the risk to quit my job and do what he did.
Have you?
A quick look at Mr Hanauer's bio shows a family history of creating jobs. But for some reason he chooses to take the position he is not a job creator. Seems he got his start in his family business. Interesting. Who created his first job?
And now his is a venture capitalist. I guess he takes the position that customers created him and his businesses.
Well one could say that. But where did his customers' money come from? Most likely form a job they have because someone else started a business.
Maybe M. Hanauer has a guilty conscience.
Poorwamon, you may want t kiss him. I have a feeling if he told the owner of my neighborhood BBQ shop he was not a job creator, he would like to smack the crap out of him.
Mr. BBQ could well expand his business and become a national franchise and become very wealthy. Mr. Hanauer
would say his customers created that business.
Wrong. Br BBQ for whatever reason has not gone national. Maybe it is because his doesn't want the extra risk or stress.
But if he did he would be the job creator. Period. No the waiting customers.
In fact, Mr. BBQ was not only a business starter, he really was the creator of his own job. He was his first employee. So who really creates jobs. He who creates his own job first.
So when everyone is asking "where are the jobs?" The answer is "in you hands". Create your own job.
Your idea would simply cause inflation. Causing the 10K to be to enough to provide the intended help. Thus the next idea would be give the 5K more. On and on. this is NOT a solution.
Just because trickle worn through intermediaries doe not work, it is not a foregone conclusion that direct trickle down will work.
The benefits are meant to "trickle" not "flow" to those who are supposedly intended to gain from the policy.
The old ideas do not seem to be working, so maybe it is time for something new!
R
She has a Position as a news-woman on CBC.
I always liked the radio Program called ` Q.
`
He'd always begin his 'gig' with Time & Day.
That way I got to find out what day it was.
`
"Hi. Happy Weds-day. This is Jeoff Gamichi.
I never can spell French. I enjoyed Interviews.
He Listen ti the Son of ` Bob Marley, Glass,
Philip - Einstein In New York City. Other too.
`
Nova Scotia Folk thought I played baseball?
People would sometimes call me `Hey Yankee.
I told them City Slicks get ugly-sick. It's True.
I heard that ref a "Cognitive Psychology Magazine.
I done forgot How Fun it was here @ Open Salon.
It's like eating ice (Good) cream and gaining weight.
`
I seem to be having technical difficulty. No worry.
We can eat our ice cream while its (still) on plate.
Some days I smile and intentionally Irritate folk.
I sure hope You don't Mind.
I'll email to Warren Buffet.
He's One Good Billionaire.
I promise. I'll jest email it.
Seriously.
A Good human wears a cloak.
But, there are no cloak pockets.
I walk off. It's to calm/half-grin.
Home can become a gymnasium.
I may eat`Clear Spring's Creams.
Cottage Cheese-Gain 100-pounds.
No carry can of Mace. Deodorants.
Hang dirty undies out. It is sunny.
Wash-Post likes Warren Buffet.
He washes his own long-johns.
He has a proper smell. Oh, my.
I appreciate your frustration that the government......
"""doesn't give a f*** about the immense suffering the economic crisis has caused ordinary people."""
.......but, honestly now, did you think they would? The politicians who make up the government are owned by the same people who own Wall St. Representatives of "The People" they are not!
Yet there are those who insist that some worthwhile purpose is served by taking part in that disgusting mockery, called elections, by voting for one of these sham 'representatives.'
Manufacturing will return to America only when automated plants are able to undercut even the minuscule wages paid in 3rd world countries. The plain fact is that full employment is a thing of the past and we have got to find an equitable way to separate 'jobs' from 'income'.
My suggestion, made three years ago, was only intended as a quick fix to a plummeting economy in the US. Obviously all the problems that caused those problems in the first place will need to be addressed or they will just repeat ad infinitum.
Donegal,
Good points!
Thanks for your contribution.
onislandtime,
I live in a world where the key question is, "Is This This Best That We Can Do?" I don't think that I can determine what "the best" is, but that doesn't stop me from trying to find "a wee bit better".
Joseph,
I have been an entrepreneur all of my life - in between jobs to earn enough to stay alive. Your thinking is muddled about this. Let me see how much your Mr. BBQ would earn if he opened his business in the middle of the desert or at the north pole. Business, any business, depends on customers. Without consumers, production has no purpose, and is completely pointless. Mr. BBQ would pack up and go home in a heartbeat if he had no customers; no consumers of his product/service.
Even the most basic knowledge of economics will tell you that the equation, in any economic system, is the relationship between Production and Consumption. This equation can only remain balanced if it is strictly controlled by the social system. It is the social system that acts as a governor and ought to prevent the economic engine from revving up to run-away levels. Unfortunately the present managers of our social system have been bought off by greed capitalists and have failed to control the greed factor inherent in THIS form of capitalism.
Dumping the whole economic system - capitalism - because it isn't working right would be like dumping a Rolls Royce because it has engine problems. My quick fix is not intended to be a proper repair; it is just a means of getting us to the point where we can make the necessary changes that would carry us onward in our journey. I know as well as you do that "direct trickle down" is not a permanent solution. Having a respite from our problems might give us time to find that permanent solution though.
Out,
It is most definitely time for "something new"! How about we work on designing an economic system that will do the job we expect an economic system to do? While wide open laissez faire capitalism is great for developing the potential of a nation when it is starting from scratch, as America (and other countries) did, it is piss poor at maintaining a sustainable level of income for a large population in a highly developed nation.
We have reached, indeed we've passed, the point where we need to change the form of capitalism we use to one that is far more egalitarian. If we can't do that then we'll continue to spin out of control and end up with either a fascist oligarchy (where we're headed right now) or a revolution will occur and we could find ourselves jumping out of the frying pan of greed-capitalism and into the fire of power-game-socialism. I doubt that we'd find either very much to our liking.
Gerald,
As far as he has gone with his thesis, he has been unusually forthcoming and frank. He has, however, only dealt with one aspect of the untruths we so often hear about how "valuable" the elite are to us and our society. He's really only reminding us of the old, old adage that says, "The Customer Is King"!
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Would "Trickle Up" work, do you think? Naw, trickling only moves down, thanks to gravity. I'm getting a vision of wet pants legs with that one.
Then how about making it appear positive to business with a catch phrase like "Consumer accelerated business"?
Explain that when consumers spend money, businesses grow. If the government gives money to businesses in the form of tax breaks, the government is actually "picking and choosing winners". That's so wrong, as is said about government promotion of any ground breaking company that eventually fails, like Solyndra (but not for large corporations like GM or any large financial corporations). But when the government gives money to consumers, people will decide which businesses thrive or fail, and that is the natural preferred way.
The only problem is that the public can't afford to hire lobbyists to buy politicians who will make laws to give money to them. Only large corporations and managers who use them to pay themselves huge salaries and bonuses can afford to buy politicians.
I have already used "Trickle Up" for this kind of economic stimulus. I like it but am open to any other easily remembered, quick, short form of description.
The public doesn't need to "afford to buy politicians". It needs to do away with politicians and political parties that can be bought - and they ALL can.
The concept of electing "leaders" or "representatives" has become obsolete in our modern society. While it might have some use in small communities where everyone knows everyone else, it has no use at all in a larger context where we only get to "know" a candidate from his advertising campaign. In the end we wind up with a person who is only good at one thing - getting elected. And that is not the skill set that is needed to manage our affairs for us.
Also, as we have learned to our extreme discomfort, any sector of the economic system that has the funds to support an election campaign, can control who gets elected. This makes the person elected a servant of the "money provider" that got him elected instead of a representative of those who cast votes for him.
We 'The People' have, since birth, been indoctrinated with the idea that we cannot manage the society in which we live. We've been told endlessly that we "need" representatives to do this for us. I call bullshit! If we're capable of electing "leaders", then we're capable of doing the job ourselves.
Were all competent, non-criminal citizens prepared to take this management responsibility on for a few years each, we could select our "managers" by lot. Each person so selected would only serve his society for one term; no career politicians sucking at the public trough or needing funds to get (re)elected. No political parties to sell out or to be controlled by religious nuts. Just good ol' honest citizens doing their share to make our society serve our population in the best way it can; citizens who would equally represent all genders, colours, ages, ethnic origins, and income levels.
If this form of social structure were accompanied by an equitable form of economic system (I like Citizens' Capitalism), where all had equal opportunities to develop their own personal skills to the limits of their abilities and sufficient income to live decently, we'd have a winner!
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In the interim, between when this was written and now, we can clearly see how well "trickle down" works. Everything is back to normal for the big money interests on Wall St. and "the people" still don't have adequate incomes.
The time has come for us to look at ways of unhooking employment and income. It is not carved in stone that one has to be hitched to the other. Heck, it sure isn't for the fat cats who've inherited theirs! Modern capitalist nations are wealthy enough so that every citizen ought to have a 'birthright' inheritance as a fair and equitable share of that wealth. One that allows him/her to live a modest life without needing to become a rent-a-slave and renting him/herself out to the monied class in return for a meagre income that can be pulled out from under him/her at any time the master decides to dispense with their services/labour.
Why is is OK for the kids of the wealthy to inherit great unearned wealth but the kids of the middle/working class have to spend their lives in servitude to big money? EVERY citizen of a society plays a role in how wealthy that society is. Is it unjust to set up a means of fairly sharing that wealth? You can bet your bippy that all the middle class/working citizens share the pain when things go sour!
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Kind of puts the lie to the the commonly repeated notion that everybody has the same chance, so it's your own fault if you don't become rich and successful.
Your point is well taken but I must point out that you appear to have never been"rich", and have little idea of how wealth is held by the wealthy. Since I have been fortunate enough to have twice been a bit rich (if being a small millionaire counts as "rich"), let me enlighten you.
Very, very seldom does anyone who is rich have huge sums of money in the bank. Money that is kept is taxable. Money that is re-invested is not. What it earns when re-invested is also re-invested as quickly as possible so as to avoid that taxation. That means that the only money that gets taxed is that which they keep out for their own use.
Now that amount probably would seem a lot to you or to any working person but it represents only a small fraction of what they bring in for the year.
The lack of understanding, by most 'progressives' of how this works has led many of them to reject the idea of a flat tax on income - no exemption for invested money - because they see a flat tax as hitting regular folks harder than the present progressively higher-the-more-you-earn income tax. They are wrong. There could (and would) still be a cut-off point, below which no tax would be paid, just as there is now.
The rich really do pay much more tax than the rest of the people because their expensive life-style causes them to take, from their investment earnings, a pretty doggone nice income. But they pay a smaller percentage of tax on their entire earnings since they pay no income taxes on the majority of their earnings which have been re-invested.
If a flat tax were levied on ALL income above a certain level (I'd suggest no income taxes on less than $100k per year), regardless of whether or not it was re-invested, then the government could lower the tax rate for everybody while increasing the actual revenues tremendously!
Taxing corporations is shooting ourselves in the foot. Corporations NEVER pay taxes. They calculate what their tax bill will be and add it onto their prices. That means that we, the consumers of their products/services, pay those taxes as a "hidden tax" that is part of the price we pay for their products.
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Oops.
Try again?
Go to cathouse?
I am tempted to?
Whoops. We bumped on the OSer Feed.
`
Money is not 'Filthy-Lucre' if it's shared.
It's intended to do good. Not to be squandered,
hoarded, wasted, snorted, or used to Gulp-Gin!
`
In DC I ask "silly"questions. How else can we know?
I thought to toss Stock-Yard money at a French brew?
WASTREL!
I was told wine @ $350.00 a 'jug' is normal. Go lobby?
Then - I was told they buy 50- year old French Cognac.
Guess how cheap?
`
$6,000 a bottle. Honest-Gaud.
Some jugs have a sheath carrier.
The container comes with hides.
The fancy-bottle has a cork too?
The 'jug' has dead squirrel hide.
The Killer-Brew pours out mouth.
You can see?
Red Lips too.
Blood-red-lips.
`
My get very blue.
Hence - Misery.
Suffering. Pain.
Obtuse. Oy Evil.
`
In the past EVIL?
It possesses One.
You can discern.
`
Filthy Greedy Suffer.
Poor People Suffer.
Delusional? Numb.
`
Care/Courage same/same.
By Nature peaceful people?
O, I feel like a morel pizza.
`
This is just my observation.
It's not a paid ad I approve.
It's just a recall. Memories.
`
Thanks.
bump fun
no get fat lip
no get black eye
no got brown nose
we behave. sneeze.
allergy. bless cats.