How much was that first bail out under the Bush administration? Does anyone even remember at this point? The numbers have gotten so mind boggling…
The banks were in trouble (allegedly) because of people defaulting on their mortgages and credit cards.
The car companies were in trouble (allegedly) because people couldn’t afford to buy new cars.
I say allegedly because we all know these corporations were inclined toward excesses. I’m not saying we the public weren’t defaulting, but we did not have multi million dollar salaries and private jets.
At the time, I still had a job, and a very thoughtful, sort of boss. He was sitting in his office one day and very busy figuring something out. He called me in and said, “You know, they could have given every man, woman, and child $250,000.”
Now, I don’t know what the amount of that first bail outs or stimulus packages were, and there have been many since then. And I do not know if his figures were accurate. I have been trying to figure this myself. And do you know your average calculator doesn’t go into the trillions? So I had to do the math with pencil and paper. But I have decided to expand on my boss’s random thought of everyone getting $250,000.
Given a population of 308,782,757 (at the moment I started figuring this) that would be $78,895,689,250,000. So let’s say 79 trillion dollars. Now I would not give it to anyone under 18 (24.3%) or over 65 (12.8%). That would drop us down to a stimulus package of 68 trillion dollars. No under 18’s because someone who is irresponsible enough to have 14 kids should not get a winning lottery ticket out of this. Over 65? Hopefully you have your social security, possibly a pension, and medicare. And hopefully at your age you have paid off your mortgage and if you are in an upside down mortgage situation, well what happened to with age comes wisdom? We might consider individual cases at a later date after the core group is taken care of. If you are over sixty five, still working, married to someone under sixty five and still raising a family, you would be entitled. And if you have managed to hold on to your job, in this economy, and you earn over $100,000 a year, sorry no money for you. And if you are in trouble? Tough. Start learning a little fiscal responsibility. The rest of us should all be as lucky as you are.
Now, this money comes with strings. It would be handled just like a real estate closing. Which is the first benefit – all those “closers” who no longer have jobs (me) would have to be rehired to facilitate this. And you are not just being handed the money. Mortgages, credit card debt, student loans, all must be paid off. And you have to buy a new car if there is enough left. Let’s take my household as an example. Me, my husband, and a twenty year old son still at home. So we would get $750,000. First, mortgage must get paid off. So there goes $280,000. No car loans. But credit card debt of $10,000. Student loans take care of another $30,000. We are each allowed up to $35,000 for a new car. You want a car that costs more than that, take care of it yourself. We are lucky and have no medical debt at moment or anything else other than normal living expenses. That leaves us $325,000. There is a house my son would like to buy for $240,000. And the remaining $85,000? Do what you want. I would choose to invest for my retirement but invest or spend – stimulating the economy. As I think about it, if you have an excess, let’s say 10% goes to a local charity of your choosing.
So see how it would work. Mortgages and credit card debt would be cleared up for the most part so the banks should be able to stay afloat. And if they aren’t, then it is their own excess that is the problem and if they fail, they fail. I got a big kick out of hearing “they are too big for us to let them fail”. Honey, nobody is too big. If they fail, they fail. Some new upstart will come and take their place. THAT IS THE AMERICAN WAY!
So take my household and multiply it by households all over America. We paid off the banks. So the banks are okay. We bought cars. So the car industry is okay. We created jobs. I get to go back to work. And when the stimulus is done, I will probably keep working because the housing market has been stimulated so the title companies – who will handle this just like a refi closing – will continue to need me. My husband and another Realtor will each get a commission when my son buys his house. Once our house is paid off, we will probably sell it and buy a condo here in RI and another in FL.
Of course, this will need some tweaking. You must be a US citizen, or a resident alien on the way to citizenship – funds would be put in reserve until you become a citizen, as long as you were here since before the date of the first stimulus. If you are not a homeowner, and have no desire to become one – some people don’t want a home, you get up to $35,000 for a car, credit card debt paid, student loans paid, and one year of rent. The homeless pose a further problem. That will have to be handled on a case by case basis (creating more jobs). Some people were homeless when the economy was good due to mental illness or addiction. As I said, this will take a little tweaking.
Now, I realize I may not be as smart as George Bush (I don’t mean that – any one is as smart as Bush) or Barak Obama, but I think this would have done more for the economy than anything they have come up with. Too bad nobody asked me first…
Oh, and I could take care of the whole health care thing too…