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Wednesday, January 28, 2009

America For Sale

Soooooo... another $819 BILLION of YOUR money is on its way into the hands of some government official to be used for who knows what... (alledgedly $350,000,000 of it to go to STD prevention education and so on and so on). I fear we are moving so far from our roots as a nation that we might not get back. And it's not just the Democrats. Bush opened the door for such "stimulus" plans with his failed attempt just last year.

The new stimulus package passed in the House today by a vote of 244-188. It's now on its way to the Senate.

Sometimes I wonder if lawmakers are deaf or just blinded by their own agendas... Cause there ARE some good ideas out there. Ideas that would not be mere short-term fixes creating more long-term problems, not to mention more dependence on Uncle Sam.

Below is one (a stimulus idea, that is) I came across earlier this week. What do you think? What would your solution look like?


GNP = M x V (where M is Money Supply & V is velocity of money)

"In large part, the $1 trillion stimulus package in discussion in both houses of congress right now is focused on the government’s ability to spend money and spend it as quickly as possible. The majority of our legislators understand, albeit to some small degree, that money has to change hands quickly in order to spur our economy. This is true, but they are going about it all wrong. Bureaucracies are not the nimblest of creatures. Government works projects don’t get launched in the time frame necessary to have a slowing effect on this downward spiral. By the time they begin to have an impact, everyone is pinching dollars even more than before and the net effect is nil.

The only way to reverse this slide is to empower the people at the expense of government. If every other axiom proves false, this one still rings true – Americans can sniff out a bargain. It’s time to put our country up for sale. Everything needs to be incentivized right now. Give a 20% tax credit for new machinery purchases for small businesses – but give an expiration date for this offer. Dole out employment incentives that make it an attractive time for employers to snatch up some of those people standing in unemployment lines. Offer a 4% mortgage rate for owner occupied home purchases made within the next six months – I’d personally jump out and buy. Go a step further and offer a 4.25% rate for investment properties, and I will guarantee you that this will stem the tide of foreclosures and cause property values to begin moving in the positive direction. Instead of propping up the auto industry with $25 billion in aid, give the American consumers $1500 tax rebates when they purchase American automobiles. All of these things will cause growth without creating a long term reliance on government.

The focus should not be on the money supply but rather on the velocity of money. Money has to change hands in order for growth to occur. You can run the printing presses 24/7 and our economy won’t turn around because people and banks are scared and tight-fisted. That’s why it’s possible, and quite probable, that deflation will persist in America even when the printing presses are overheating. We’re in a liquidity trap, and it will stick around a long time if we’re unable to motivate the American public to open up their wallets and spend us out of this mess.

Long term, we’re staring down profound inflationary pressures, raging deficits and a weakening dollar. Let’s not compound those long term problems with fruitless short term programs. More dollars & more debt are necessary at this point in time, but foolish programs that won’t conquer our short term problems will only pump excess money into our economy and exacerbate our long term ones. Only a year ago, we did just that by passing out refund checks. Predictably though, only 1/3 of those checks actually got spent – that’s not much bang for your buck. That’s why incentives are more powerful and much more fruitful - You actually have to spend in order to get the benefit. Right now, we don’t need promises of long term tax breaks or more government jobs. We need to get the heart pumping again, and nothing revs up Americans like a sale!"


Anonymous said...

Most of us think it will get "cleaned up" in the Senate.

It was good to have the whole Conference.

Anonymous said...

I like Rush's plan..it's bipartisan: http://www.rushlimbaugh.com/home/daily/site_012609/content/01125108.guest.html.


Anonymous said...

And some are making a big deal about that today (it being bipartisan)


Natalie said...

Nothing revs up Americans like a sale... wow I feel like someone's been reading my diary! ;)