Setting the Record Straight

December 20, 2008

Bailout or Gift Card?

Bailout by Trickle-Up Gift Card—Part I

     The effort to correct the financial crisis in the United States has been largely ineffective, and for good reason. The people in charge, mostly at the top of the economic arm of the Bush administration, but aided and abetted by similarly minded people in Congress, continue to focus on the top of the pyramid instead of thesr-giftcardjpeg bottom.
     We continue to beat the drum here in favor of some “trickle-up” economic thinking instead of “trickle-down.” So here is a proposal for consideration that is outside the box of what everyone has been hearing from those in charge.
     This proposed solution, as with much of outside-the-box thinking, probably has some holes in it others will be quick to point out, but at least consider it as a possible point of departure for figuring out a solution.
     This proposal was inspired by one of a series of off-the-wall suggestions from largely uninformed and somewhat naïve people (and this proposal may give us membership in that group) in response to proposals from the top.
     Most are based on faulty math and false statistics, so let us begin with some true figures. The $700 billion bailout package the federal government currently is sitting on is equivalent to nearly $7,000 for each of the 111.2 million U.S. households. There are 138 million taxpayers, but millions who don’t earn enough to pay taxes.

     Throwing that much money at every U.S. family without strings attached would only encourage more of the same reckless spending without solving the financial or any other problems. But the idea does suggest a trickle-up solution that inspires us to give some serious thought to the basic idea.
     We see a possibility of solving not only the financial crisis, but many other social crises in America with that $700 billion. Unfortunately the people in charge of those funds don’t see the little people way down there at the bottom of the pile have looked only at the top of the financial pyramid because of trickle-down groupthink. Even our suggestion begins with the classic Republican economic model of tax credits to be filtered back into the economy through private enterprise.
     The stimulus checks so far have been ineffective in overcoming the financial collapse, in part because they are too little at a maximum of $600 per taxpayer and totally unstructured. Even if those checks had stimulated anything, they would have had only a narrow impact.
     The incoming Obama administration faces many more problems than the financial crisis, although it currently takes first place in concern. The major issues include the climate crisis, the associated issue of U.S. dependency on both foreign and domestic oil, the individual-based credit crisis, the savings crisis, foreclosure crisis and on and on.

     So what if the government, instead of worrying about big business and those at the top of the financial pyramid, it focuses instead on a “trickle-up” plan, beginning at the bottom of that pyramid.
     That brings us to the proposal. Shoot holes in it as you will, but at least consider it as a takeoff point for considering a solution to the crises at hand. We can already see some problems with foreign trade agreements, political problems and other likely attacks on the proposal, but let us consider it as a new way of looking at the situation.
     Instead of bailing out anyone, give not a three-figure stimulus check to each American taxpayer, give each of the 111 million households (rather than each of the 138 million taxpayers, since the very bottom does not make enough to pay taxes) a gift card similar to those offered by stores and good only in that store, valued at $5,000 to $20,000.

Next: Part II–Gift cards for, cars, cards, loans and green 

(from http://www.straightrecord.com)

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