Posted by
rycK on Sunday, January 11, 2009 2:40:30 PM
Novel Ways to Help
Obama Fix the Economy: A Few Thoughts and Helpful Suggestions
Liberalism,
like its founding notions embedded in Marxism and the quaint egalitarianism of
the French Revolution, has to continually cope with its ongoing constraint: the
quest for wealth in order to fulfill its several objectives.
They always need money it seems. Today, I
think it appropriate to open a discussion on what options the liberals have in
terms of wealth gathering as we face some kind of a possible impasse in spending
and deficits in Congress and coupled with assured fear that printing too much
money
will produce massive inflation
and that will not help their goals in the future. Many conservative Democrats
may even vote against too much spending. The liberals need a voluntary
solution to the redistribution of wealth and we all know where that wealth
lies.
We know
that liberals cannot and will not cease taxation and spending
as we hear from President-elect Obama so the money must come from elsewhere to
be novel. A trillion here in budget deficits and a trillion there in quantitative easing
will soon add up to some large sum and where will it come from? From taxes? What
the liberals do not want to see is the visible financial collapse of California or New York, which is now bankrupt and
begging for alms from anywhere they can get some. The Californians have the
correct social plan for our society.
The Brits and others are headed for such a similar outcome and are now going to
secretly print money.
The collapse of California or England might reflect negatively upon
liberalism so we need a voluntary
process whereby we can all contribute
to the Obama plan for rescuing our economy.
From an interview with George Stephanopoulos:
“I asked the president-elect, "At the end
of the day, are you really talking about over the course of your presidency
some kind of grand bargain? That you have tax reform, healthcare reform,
entitlement reform including Social Security and Medicare, where everybody in the
country is going to have to sacrifice something, accept change for the greater good?"
"Yes,"
Obama said.
"And
when will that get done?" I asked.
"Well,
right now, I’m focused on a pretty heavy lift, which is making sure we get that
reinvestment and recovery package in place. But what you described is exactly
what we’re going to have to do. What we have to do is to take a look at our structural deficit, how are we paying for government? What are we getting
for it? And how do we make the system more efficient?"
"And
eventually sacrifice from everyone?" I asked.
"Everybody’s going to
have to give. Everybody’s going to
have to have some
skin in the game," Obama said.”-- Obama Calls for 'Grand Bargain'
on Economy: 'Everybody's Going to Have to Give' January 10, 2009.
Now, this
is very clear except for the details. To give is not the question—the question
is how much and who must give!
We know that
‘progressive’ societies like California and New York cannot manage their
finances very well in hard times so I would like to offer some suggestions to
the liberals on how they finance the New New Fair Deal they are working on:
Theory: Wealth should be redistributed
according to the notion that those who have money and assets ought to share
them with the unfortunate. This is a form of patriotism according to our Vice
President Elect.
That sharing should be voluntary
so everybody is happy and is giving some up some skin.
So,
without printing money, which would actually benefit bond and gold holders and
landlords in an inflationary or, worse, a hyperinflationary arena, we can think
about the following:
Voluntary Giving Suggestions:
[1] Any
person who has paid off their mortgage should be encouraged, by law if
necessary, to have a new federal mortgage attached to their property. The size
of the mortgage would be an arbitrary fraction, say, 20% of the current
mark-to-market price, adjustable yearly in case home values rise, and the length of the mortgage would run the
customary 30 years at 6-8% interest above the inflation rate, but would not be
tax deductible. We have to be fair here as we share the wealth. They could volunteer this gift for an 18% mortgage and
save some money on the deal. Volunteer-styled patriotism should be repaid with
a tax break.
[2] Any
person who is currently making mortgage
payments and is in NOT in danger of foreclosure would have a smaller federal
mortgage of, say, half the remaining principal due. Tax deductions on the primary mortgage would
still be tax deductible; to be fair, but the second federal mortgage payments
would not be tax deductible, again, to be fair. Again, any volunteer would get
a reduction in the mortgage at a bargain price of only 48% instead of the
government mandated 50%. That is an incentive to be fair and patriotic. That is
not so much skin.
[3] Any
person with a 401(k) or similar IRA would need to pay a mere 5% federal tax on
the balance of the account per year. 401(k)s would be frozen in place and attached to the US Treasury and any new
contributions would have to be made in a new IRA and that would be free of
taxes for 5 years, at which point the 5% federal tax would again apply and
become, again, a voluntary gift to the US Treasury. A special case is the Roth IRA where the
profits and principal were originally tax free to any owner or beneficiary and,
to be fair, that would need to incur a mandatory 50% tax on every dollar taken
out. For volunteers that would be 4.5% tax and only 48% on money taken out
just to be concise with the numbers and not make the process too complicated.
[4] Any
person with life insurance who dies needs to pay a mere 50% federal tax on that
money due within 10 days of the deceased’s departure from the tax arena. Sorry,
no incentives on this one as the citizen is now gone. That is the last of his
or her skin anyway.
[5] Any
person who leaves or tries to leave the country to relocate in a place where
taxes are lower would forfeit their mortgages, any property or jewelry and most
of their clothing, life insurance policies and IRAs to the government. These
people must be viewed as anti-volunteers and are unmistakably unpatriotic
persons.
Since the
net wealth of Americans in terms of home ownership and assets is about 57
trillion dollars, the Obama Administration would be able to spend about 2-3
trillion in non-inflated dollars on new
social programs and to restructure the mortgages of victims of the predatory
lending that caused so many credit defaults. That money would pay for a million
or more new government jobs. We would
have little inflation and no need to raise taxes! What a deal! After all, we
cannot afford inflation because that would jeopardize the government’ chances
of getting a big chunk of the 57 trillion dollars. Let us think in a positive
manner here.
Since we
need to be fair about this I suggest
we discuss this openly and fairly in
this blog without rancor or cynicism and find ways to be ‘fair’ and ‘patriotic’
and help Obama fix this nation without printing money. We can all be volunteers
and give up a bit of skin here and there.
What do you think? Isn’t this
wonderful? Let us all volunteer some skin.
rycK
Comments
to: ryckki@gmail.com