The recent and current government giveaways have been institutionalized so that banks, auto companies, mortgage operations and the like have gotten well at the expense of the ordinary taxpayers who have done nothing to cause the current economic freefall. The financial institutions are supposed to make loans and cause people to start buying, thus causing manufacturers to put workers back on the job making what’s bought, and the cycle is supposed to gain speed and bring success regarding the pursuit of happiness. The manufacturers’ take is designed to simply create cash flow to pay workers until things get better or another giveaway is needed, whichever comes first.
There’s a problem with all of this, namely, that the business people, financial and otherwise, are looking out for themselves...sort of with the attitude of “let them eat cake” with respect to the hoi polloi. Under the auspices of the giveaways, it takes something like $250,000 to create a new job, taking Obama’s figure of three million new jobs combined with his cash outlay as the benchmark, according to the economists.
The problem long in the making has been due to unrealistic/neglectful legislative actions that wrecked the housing market but has been most intensely enhanced since 2007, when the democrats took over Congress. Warnings by President Bush go as far back as 2004 with regard to the most egregious elements – Freddie Mac & Fannie Mae – but were not addressed by congressional heads long buried in the sands of self-interest and/or sheer incompetence.
The damage is done but the correction, i.e., borrowing in order to bring prosperity, is as silly for the government as it is for a household. Giving money to the institutions, translated the fat cats who own enough avarice and know-how to sacrifice the body politic on the altar of greed, is folly. The notion that tens of thousands of people should go to work for the federal government (pick-and-shovel stuff, presumably) is inane with respect to infrastructure, since machines that call for only a handful of people to do what required thousands of people in the 1930s (Great Depression) form the picture today.
If there must be giveaways, make them work, although the giveaways of last year did not induce much spending. The needed deal is to make the incentive to purchase intense enough to cause...well, purchasing. Suppose, instead of giving money to Chrysler, the government offered to pay a third of the difference if an individual would trade in his car for a new one. The stipulation for the dealer would be that he not gouge but use the list price. This would keep his cash flow going, thus his employees on the job, and Chrysler making cars.
The same deal could apply to any appliance, with or without trade-in. It could even be considered for house purchases. In this way, the money would be used to actually induce spending, thus increasing manufacturing and bringing back the jobs. Actually, Obama’s $750 billion, if divided per capita among all the country’s 300 million people, would mean $2500 for each person. Think what that would mean on a per-family basis. There would be spending then.
Or, instead of giving money to banks or other financial institutions that obviously have no interest in solving the problem, why not have the government make loans at one percent with reasonable time periods for repayment. That kind of competition would get the attention of the usury cutthroats and the banks would start lending again at appropriate rates rather than just go out of business, which many of them have done already? A couple months of this, and the government program could be stopped. After all, the government is not in the financial business and shouldn’t be in any kind of commercial undertaking.
The point? Simply that getting the windfalls into the hands of the people, thus giving them incentive enough to spend them is far better than giving money to entities having as their main interest the making of as many big bucks as possible, the devil take the hindmost and the public be damned. The Congress got the country into this mess with the stupid philosophy that people must buy things they can’t afford. It’s made up of millionaires and/or people making hefty wages and is blinded to the fact that the money belongs to the people in the first place and so should be given back to them in the second place.
Is all this too simple? Probably, but it sure makes more sense than spreading money around almost willy- nilly (nobody even knows where the last $350 billion giveaway is) to places where corruption and greed will cause it to literally be thrown away. If the Congress and the president can (gasp) structure the proper regulations to keep everyone honest in the plan mentioned here, happiness might even be caught instead of constantly pursued.
Don’t bet on it, however. An idea of honesty in government can be seen in Obama’s selection of his treasury secretary, a man who consciously and greedily did not pay his income taxes to the tune of some $34,000 a few years ago...but all of a sudden caught his “mistake” when he received the nomination, and paid up. He should be on his way to the cooler; instead, he’s on his way to an office that demands the one thing he doesn’t have – HONESTY!
And so it goes.
Jim Clark
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