The MG Recovery Plan

Given: The U.S. economy is in a slump due to widespread failure of the finance, home mortgage and banking industries; and a loss of personal savings, credit worthiness and jobs by the population. Adverse social conditions are aggravated by widening losses of health care, housing and access to education.

Problem (To find): How should we stimulate the U.S. economy, if given an infusion of up to $1T of government money per fiscal year, for an unspecified sequence of years?

Critique of Old Method: The old method was to subsidize the finance and banking industry to attempt to artificially inflate the value of their worthless assets, to try to continue the prior mode of economic activity. This method is a total failure because the assets in question have a market value of zero, there is no money still hoarded and left to spend by the general population, and they are now wary of spending anything on the same types of “products” offered by the fraudulent home mortgage and finance industries (stocks); there is an equal distaste for U.S. equity investment paper on the part of foreign investors (who have been stung with toxic sub-prime “assets”); the current method funds the institutions that created the problem without nationalizing them, expelling their managers and liquidating them at market value, thus forgiving all household debtors. In essence the current method is a subsidy of financial incompetents and criminals to substitute real tax dollars to them in place of now-worthless debt paper they hold and which are formally liabilities to mortgagees in the general population.

New Method: The clear solution is to stop throwing good money after bad, and especially to the very people and institutions that caused such devastation. Nationalize, liquidate at actual current market rates, and prosecute for fraud, as widely as possible, to send an important message and protect the public and its economic future.

However, we remain with the problem of reforming our finance and banking systems, and revitalizing the economy by having money cycle through its many tiers, institutions and individual enterprises, so it can serve basic human needs. By basic human needs, I refer to a system of just compensation in the many exchanges of labor and services for exchangeable value, which is to say money. Financial speculation is simply a greed industry, and there is no need to compensate for gambling losses, nor to assist in the gaming of financial systems for the profit of a parasitic class of investors.

Therefore, consider the following model for economic stimulus.

There are over 116 million households, voters, and filings of personal income taxes; give each a tax-exempt subsidy, as described in a moment. Corporations of all types are excluded; the plan is strictly for actual individual human beings and households (individuals, married filing jointly and/or separately, and households).

Do NOT fund any financial institution by the old method, period. Let them succumb to the market forces they praised so assiduously. Instead take the $1T (per year for several years) and apply it to the subsidy of individuals by this formula:

Award = [($150k – I)/$150k] x $14,562.11

where I is the gross income of the recipient excluding the new award. So, a person at the poverty level (and those who need not file tax forms must be sought out to be given their awards) can receive up to $14,562.11, which is essentially poverty level annual income. As income increases, the award decreases. For incomes at or above $150k, there is no award.

Another component of this recovery would be a tax increase on corporations and personal income above $150k. One possibility is to continue the award formula beyond $150k, and allow the negative number to show the additional tax owed. This may seem too severe, and perhaps would be moderated.

Given the existing distribution of income in the U.S., this plan would distribute nearly $1T to over 116 million households, for a per capita (household) average of $8500.

George W. Bush was fond of saying “It’s not the government’s money, it’s the people’s money.” Alright then, give it back to the actual people, who have an actual need for it (and usually don’t have offshore accounts), and they will stimulate every aspect of the economy. It is from that resurgent economic activity of the general population that the higher tiers of finance: banks, investment firms, manufacturers (remember those?), consumer products industries, construction, housing, the entire corporate structure will be able to prosper from — honestly.

Why not invest our nation’s wealth in our nation’s people? What other choice is really justified?

MANUEL GARCIA, Jr. can be reached at mango@idiom.com

More articles by:

Manuel Garcia, Jr, once a physicist, is now a lazy househusband who writes out his analyses of physical or societal problems or interactions. He can be reached at mangogarcia@att.net

December 19, 2018
Carl Boggs
Russophobia and the Specter of War
Jonathan Cook
American Public’s Backing for One-State Solution Falls on Deaf Ears
Daniel Warner
1968: The Year That Will Not Go Away
Arshad Khan
Developing Country Issues at COP24 … and a Bit of Good News for Solar Power and Carbon Capture
Kenneth Surin
Trump’s African Pivot: Another Swipe at China
Patrick Bond
South Africa Searches for a Financial Parachute, Now That a $170 Billion Foreign Debt Cliff Looms
Tom Clifford
Trade for Hostages? Trump’s New Approach to China
Binoy Kampmark
May Days in Britain
John Feffer
Globalists Really Are Ruining Your Life
John O'Kane
Drops and the Dropped: Diversity and the Midterm Elections
December 18, 2018
Charles Pierson
Where No Corn Has Grown Before: Better Living Through Climate Change?
Evaggelos Vallianatos
The Waters of American Democracy
Patrick Cockburn
Will Anger in Washington Over the Murder of Khashoggi End the War in Yemen?
George Ochenski
Trump is on the Ropes, But the Pillage of Natural Resources Continues
Farzana Versey
Tribals, Missionaries and Hindutva
Robert Hunziker
Is COP24 One More Big Bust?
David Macaray
The Truth About Nursing Homes
Nino Pagliccia
Have the Russian Military Aircrafts in Venezuela Breached the Door to “America’s Backyard”?
Paul Edwards
Make America Grate Again
David Rosnick
The Impact of OPEC on Climate Change
Binoy Kampmark
The Kosovo Blunder: Moving Towards a Standing Army
Andrew Stewart
Shine a Light for Immigration Rights in Providence
December 17, 2018
Susan Abulhawa
Marc Lamont Hill’s Detractors are the True Anti-Semites
Jake Palmer
Viktor Orban, Trump and the Populist Battle Over Public Space
Martha Rosenberg
Big Pharma Fights Proposal to Keep It From Looting Medicare
David Rosen
December 17th: International Day to End Violence against Sex Workers
Binoy Kampmark
The Case that Dare Not Speak Its Name: the Conviction of Cardinal Pell
Dave Lindorff
Making Trump and Other Climate Criminals Pay
Bill Martin
Seeing Yellow
Julian Vigo
The World Google Controls and Surveillance Capitalism
What is Neoliberalism?
James Haught
Evangelicals Vote, “Nones” Falter
Vacy Vlanza
The Australian Prime Minister’s Rapture for Jerusalem
Martin Billheimer
Late Year’s Hits for the Hanging Sock
Weekend Edition
December 14, 2018
Friday - Sunday
Andrew Levine
A Tale of Two Cities
Peter Linebaugh
The Significance of The Common Wind
Bruce E. Levine
The Ketamine Chorus: NYT Trumpets New Anti-Suicide Drug
Jeffrey St. Clair
Roaming Charges: Fathers and Sons, Bushes and Bin Ladens
Kathy Deacon
Coffee, Social Stratification and the Retail Sector in a Small Maritime Village
Nick Pemberton
Praise For America’s Second Leading Intellectual
Robert Hunziker
The Yellow Vest Insurgency – What’s Next?
Nick Alexandrov
George H. W. Bush: Another Eulogy
Patrick Cockburn
The Yemeni Dead: Six Times Higher Than Previously Reported
Brian Cloughley
Principles and Morality Versus Cash and Profit? No Contest
Michael F. Duggan
Climate Change and the Limits of Reason