Saturday, February 7, 2009
In addition to jobs for green energy, infrastructure and education Congress should divide the next mammoth bailout the Senate Finance Committee is considering among American Citizens, by sending each a combination credit/debit card (let’s call it the Uncle Sam Congressional Card or USCC card) with an early expiration date to force spending now. Depending on formulation this could give $10,000 or more to each American family.
Who would get the Uncle Sam Congressional Card (USCC card)?
1. Every American family earning less than say $300,000 in taxable income would get a USCC worth $10,000 and each individual earning less than say $200,000 would get a USCC worth $5,000. (Congress will decide who will not get the USCC card; however, a cut off of $250,000 is much too low because if families earning $250,000 have kids and live in a big city they can barely afford rent, school, food, etc. Therefore, they deserve to share in this bailout, especially if they have lost their job/s). People earning over $300,000 should not get the card.
How would the USCC card be given out?
1. The Federal government gives Food Stamp Credit Cards to the poor and unemployed. The IRS has taxpayer contact information and with computers one can merge all taxpayers’ contact information with the Food Stamp Credit Card data base.
2. To save mailing costs, taxpayers can pick up their USCC cards at:
a) Banks; or
b) Post Offices; or
c) Automobile registry offices; or
d) Wherever Congress mandates.
3. Those who earn so little they do not have to pay taxes would also get the USCC card.
Food Stamp recipients are already given a Federal credit card so it should be easy to give them the USCC card, and to expand that program.
How the Uncle Sam Congressional Card (USCC) Would Work
1. The card must have an early expiration date to stimulate spending immediately.
2. This credit/debit card (USCC) should allow the taxpayer to buy whatever he/she wants up to the amount on the card. This will stimulate sales and thus hiring, immediately.
3. This USCC card should be in addition to funds for green energy, infrastructure, education, etc. because those bailouts will create jobs over the long term whereas this card will help the recovery, and stimulate hiring, instantly.
Uncle Sam Congressional Card would be the Most Efficient Bailout
1. Giving taxpayers the money will result in the most efficient recovery possible, and the fastest.
2. With this card in hand each taxpayer will be able to get a loan since the card will represent collateral backed by the US Treasury. The banks should be prevented from refusing to lend to someone wanting to borrow as long as the card can be debited to pay off the loan.
3. Small businesses can use the card to get small loans, to pay off debts, to hire, etc. and small business would benefit because we would all have money to spend.
4. Design the USCC card so that monthly loan, rent, credit card and other payments can be automatically deducted from it, if the taxpayer so desires.
5. An expiration date must be on each card. (I suggest an expiration date of one year to speed spending and the recovery.)
To Prevent Fraud with the Uncle Sam Congressional Card (USCC)
Do exactly what is done to prevent fraud with the Food Stamp Credit Card.
In sum, the Federal Government can just expand the existing Credit Card program used for Food Stamps to include taxpaying Americans. The stimulus effect will start the minute people have money and are able to buy things again.
Monday, January 26, 2009
a) Our government has not been able to stop the flood of drugs into the USA despite spending $50 billion every year for the past 30 years;
b) Americans are spending over $65 billion yearly on drugs despite their illegality; and
c) The 50 billion spent trying to keep drugs out could be better spent educating Americans against drugs (just as we educate against alcohol and smoking)
d) Medicalizing access to drugs for addicts would reduce crime, thereby saving money usually spent on the criminal justice system and saving many lives.
e) Legalizing drugs would be an open admission of the fact that millions of Americans who use drugs are not criminals (just as those of us who drink alcohol are not considered criminals).
f) Legalizing & taxing drug sales would take billions away from terrorists whose principal source of support is drug sales; and best of all
g) Taxing drugs will put billions of dollars into the US Treasury and deprive the terrorists of their principal source of income.
Wednesday, January 21, 2009
Fact: The federal tax code favors homeowners over renters, through mortgage interest deduction.
Solution: Figure out a way to level the playing field, perhaps allowing renters to deduct all or a portion of their rent as homeowners deduct their mortgage interest.
Monday, January 19, 2009
Many of us can afford to pay something for a medicare doctor visit so......
In addition to putting medical records online and saving millions, why not charge something, even if a minimal amount, for those who still earn over $250,000 after entering medicare? (Many people don’t need medicare to be completely free and could help support it instead of being a drain on it and many would do so gladly. We are certainly not rich and yet we would gladly pay $5-25 per doctor visit, for example, to help those who cannot afford it.) Don't forget we over 65'ers are the largest growing demographic so if we each contributed something for each doctor visit Medicare would be funded.
Friday, January 16, 2009
The NY Times editorial, Government’s Promise, Jan. 20, 2009, complains there is nothing in Obama’s plan to stop foreclosures. Here’s one idea that should be considered: the Federal Government should take over /buy foreclosed houses and RENT them back to the "owners" as subsidized rental property.
One reason for this mess is the shameful lack of affordable housing for hard working Americans. Most working Americans had to borrow and go into debt because their salaries did not go up.
Renting these foreclosed houses back to their owners will:
1) allow Americans to stay in their homes
2) taxes will be paid to hard hit towns
3) neighborhoods will stay intact (not boarded up)
4) working families will have a decent place to live
1. Do not pay out to people earning over $500,000/yr after retirement.
(Perhaps let them consider their payments tax deductable contributions to help the entire country.)
2. Lower the payroll taxes on 95% of workers. To pay for this realignment of funds, raise the payroll tax on workers earning over, say $500,000. (The cap at $102,000 is way out of date. The average NYC Fire Department worker now earns $180,000 and the average Municipal Worker earns $107,000 per NPR this morning; thus the $102,000 cap is way out of date). The percentage taken out for payroll taxes should increase exponentially on salaries over $500,000. You should know that people earning $250,000 in big cities are not rich; they can barely pay their mortgage and put the kids through school, so the hikes should start at $500,000 and make the % slide upwards exponentially after $500,000 and $1million etc.
Help the consumer with Bank and Credit Card Regulation
1. Make certain predatory mortgages illegal, such as:
a) interest only mortgages
b) ARMs that go up more than 2% over the length of the loan
c) mortgages with pre-payment penalties
2. Forbid Bank Leveraging 30 to 1
Regulate banks so that funds are leveraged not more than say five to one.
3. Prohibit credit card companies from sending unsolicited credit cards and checks to people. I receive many such offers I do not want. Poor people may use these cards & checks and get further into debt.
4. Limit allowed balances on credit cards in accordance with income, as is done in France. Also limit the interest rates companies may charge on late balances. High rates were supposed to discourage spending but they only benefit rich bankers and do nothing to stop the poor from going into debt. I cannot tell you how many of my friends have overdue balances and think they are paying the introductory rate of 4.5% instead of the 28% they are actually paying.
5. Require Credit Card bills to show the balance due and the interest rate being charged for late payments in ¼ inch high letters in bright red ink.
6. Limit bank fees.
These slip through unnoticed onto many Americans statements.
Even after being reprimanded Wachovia continued to slap fees for absolutely nothing (except to make the bank richer) onto my statements. Only after I challenged the fees did the bank agree to remove them. Many working people do not have the nerve to challenge the bank and/or do not notice the fees.
7. Prohibit the Float
Banks should not be allowed to hold my money and earn interest on my money for several days before making the funds available to me, the owner of the funds. Working people may suffer most from this unfair practice.
8. Regulate Mortgage Bundling, Upfront Fees, Appraising business and Sales of Mortgages
Mortgage companies should continue to own (and thus care about) all mortgages they buy; do not allow firms to sell and resell mortgages whereby they make their money upfront on fees. The current system means that mortgagors don't care who buys the loans or if they are good quality or sub-standard. The current system hurts the middle class borrower and benefits only the banks.
9. Start charging .25 on the sale or transfer of stocks, bonds, and other financial assets including the variety of exotic financial instruments.(See Bob Herbert column, Jan. 13, 2009, NYTimes).