Baby Boomers Guide to Economic Recovery
By Joseph J Kusnell for Boomeryearbook.com
Originally written: November, 2008 – Comments added (in red) April 2009.
My Program:
In a moment, my ideas for affecting an economic recovery. But first:
Washington is spending a lot of money to save our economy but I wonder if they have any real idea what they are doing. They just gave away more money that I ever knew existed in the world and what did they get for it – nothing. Banks instead of using the money to make loans used it to make their balance sheets look better. Call it self-preservation. The car companies came and took billions with absolutely no plan whatsoever to overcome the problems that have put them in this situation in the first place. Sure they want to market new cars. But is it the cars or the companies that are the problem? Do they know that most Americans have no confidence in their products? Do they know most Americans don’t trust their products? They better solve that problem before worrying about more new cars. And once they make dependable good cars, they can insist their employees drive what they build. No more cars in the Big “3” parking lots that are made outside the US. If you want to drive them, go to work for them. We’re getting serious about survival.
And what about all this political mess with cabinet appointees with no experience taking over huge government agencies and one appointee after another having to step down for misconduct? Since when is that a good thing?
And while I am on the subject, there were also the problems of the former NJ Democratic Governor, the former NY Democratic Governor, the current NY Democratic Governor, the current NM Democratic Governor, the guy they wanted to be Secretary of the Treasury who had to withdraw because he didn’t pay his taxes , the Democratic woman from Maryland who was also in trouble with the law, Democratic Representative Alcee Hastings, the former Democratic Federal Judge who was impeached and removed from office, Representative William Jefferson, Democrat found with 90 thousand dollars hidden in his freezer, Tom Daschle Democratic nominee for Health and Human Services who had to withdraw his name because he hadn’t paid his taxes, Democratic Representative Charles Rangel who as Chairman of the (tax writing) Ways and Means Committee forgot to report $280,000.00 in income for each of eight successive years and John Edwards who was a Democratic candidate for President who had to withdraw because he was caught cheating on his wife who has cancer. And that’s not all of them but you get the idea. It’s really a good thing we elected Democrats to straighten out America.
Okay, let’s move on past that mess. So what can we do to fix this economy? Well for openers, let’s remember that the Democratic Party that now owns Congress is the party of Bill Clinton, Franklin Raines, Jim Johnson, Chuck Schummer, Barney Frank and Chris Dodd not to mention ACORN. And who are these people? Why these are the people that caused this mess in the first place. They should all be in jail for what they did to America and to the world’s economies but instead the voters entrusted them with the job of straightening out this mess. Sure there was also corporate greed that took these high interest rates and ran with them but it all started with the Democratic partisans mentioned above. They did this to us. Clinton is saying today that Bush could have done something about this but he conveniently forgets that both George Bush and John McCain tried to get congress to reign in Fannie Mae but the Democratic congress (and Democrat Maxine Waters) wouldn’t hear of it. Maxine said it was ‘racism’.
No folks, it wasn’t George Bush that did this, it was this nefarious ‘gang of six’ that did it. They abused Fannie May and Freddie Mac then they took huge political contributions from them. Just as they did from AIG. They were nothing but payoffs. Then they arranged to give mortgages to millions of people that couldn’t afford them and could never hope to pay them back. Then they were guilty of conflicts of interest by chairing banking committees that were supposed to oversee both Fannie and Freddie while instead, they looked the other way and took political contributions from them. Tell me, how do you oversee people from whom you have taken political contributions? The answer is, you don’t.
So they took the money from Fannie (a million to Obama, 800K to Dodd, 500K to Frank), plus Jim Johnson got a 21 million dollars golden parachute and Franklin Raines got 41 million and Obama smiles and looks the other way.) And nobody yet has seen Dodd’s mortgage papers he promised to produce for us when he was accused of taking a “sweetheart deal” from Countrywide. That’s what these people did and none of them are going to jail when all of them should be. That’s because they are all democrats and the American People foolishly gave them control of all of us.
So we are stuck with them and now, we have to try to get it done anyway. We have to save our country, if not the world, despite these clowns. So, here are some ideas that may help. Maybe they won’t but as the man said, “I have to try”. So here goes.
(This article was written back in November 2008. I am now adding comments in bold beneath each of my suggestions from that time. Today is May 9, 2009.)
1. Immediately set a 4.0% standard maximum interest rate for all new or refinanced mortgages. Extend available terms to 40 years. Making this new lower interest rate available to everyone will act as a superior economic stimulus because people at all income levels can refinance putting many hundreds of dollars back in their pockets each and every month from this day forward for years. In most cases, this will create a stimulus of thousands of dollars annually for all taxpayers and it will encourage employment. Although some lenders may complain, remember folks it’s better to get a guaranteed 4.0% than 0.0%. Massive homeowner default is what we are fighting now so we need to do what we need to do. Add it a tax credit for 1st time homeowners and we are on the way to recovery. This is Step #1.
Done. All three ideas have now been incorporated in our economic recovery plan, most of them in 2009. They include the lower interest rate on existing mortgages, the lower rates for refinanced mortgages, and an $8,000.00 credit for first time homebuyers.
2. For people who are upside down in their mortgages and can’t pay them regardless of Step #1, let them walk away with a check for $2500.00 specifically earmarked for 1st, last and security payment for a new apartment. If they are going to lose their homes, they still need someplace to live so we have to take care of that. We put them in and then it’s up to them to find a way to survive. That’s life. Once they are out, we put the foreclosed home on the market at the current price with a 4.0% mortgage and terms up to 40 years and we will surely sell them. This approach will also stimulate the real estate market and that should help. (And yes we can do this. We have had price and wage controls in the past when we thought it was necessary so this is necessary today.
Partially done. They didn’t quite do this but they introduced Mortgage Modification and Mortgage Forgiveness for these people which mean the same thing. I think my way would have been better but these ideas accomplish the same goal.
3. I would skip the cash rebates to taxpayers. Step #1 will replace that.
If they insist, than rather than giving cash, give credit in some form that it has to be spent and not saved or used for paying bills. That way it may stimulate the economy although in my opinion, I don’t think a single stimulus payment can do that. We need to try something different.
They ignored this step and sent out another, but reduced, stimulus check.
3. All bailout monies must be used for the intended purpose and cannot be diverted to any other institutional use. If it is to be put back into the economy, then that’s how it must be used. We need control on our bailout money under pain of penalty.
Done. U.S. Senator Claire McCaskill (D-MO) and Chuck Grassley (R-IA) introduced a bill that will significantly strengthen oversight of the $700 billion financial rescue plan. It’s a start.
4. Eliminate all capital gains taxes for the foreseeable future, Also, reduce all corporate taxes by the same percentage that the corporation employs American workers as part of its worldwide work force. This will encourage hiring of American workers.
Nothing done on this. Still waiting but not likely. This administration is anti-corporation which I fear is going to cost us jobs.
6. Remove health care costs from corporations. A national 1-2% sales tax
can be instituted to pay what corporations used to pay if that’s what it takes but we have to do something to take that non-business cost out of businesses. This will remove expenses that are no part of their businesses and will enable them to become competitive, selling more of their products, hiring more people which in turn will generate more tax revenue because of higher employment, which is what we need. Health care is a business in itself and must be treated as such.
Done. The government announced this month that health care costs would be taken out of GM and Chrysler and absorbed by the US government. A precursor, I assume, for a national health care program but it is what I think must be done. We must remove health care from the costs of running a business as other countries have done. This program will be expanded in the future.
7. Establish national caps for the payment of CEO’s of publicly traded companies no matter the form of the payment (i.e. expense accounts, stock options, and bonuses). The cap should be a multiple of the average salary of the average employee of that corporation as computed by the Labor Department. I would suggest a multiple based on the number of employees of the corporation with that cap ranging from 100-1 to 500-1. So the CEO of a company with 500,000 employees that earn an average annual wage of $50,000.00 would be entitled to compensation of 500-1 or twenty-five million dollars a year, each and every year. To earn more, he will have to raise the average salary of his employees giving him an incentive to do just that.
Done. The Government has established caps for CEO compensation. It has to become a national policy but this is the first step. I hope it is done voluntarily by corporations but this time it was done by the Federal Government with the banks that got bailout money. Again, it’s a start.
8. I would also institute a confiscatory income tax such as we had in the 60’s and the 70’s. That means that taxation on income over a certain figure per annum would be increased gradually to 70%. As an example, if the CEO was paid over 1 million a year and less than 5 million, the tax would be 50%. Between Over 5 but less than 10, would be60%. Ten and over, the excess would be taxed at 70%. Under one million would be at the normal rate. This permits people to get rich but not filthy rich. No individual needs or can use 15 homes or three airplanes. Let’s get real. (I have lowered the sample numbers from the original but in truth, the lawmakers would decide the actual numbers. So these numbers are solely used as an example.)
Being talked about but nothing done yet. I do think in the next year the maximum tax rate for our wealthiest citizens will be dramatically increased.
9. I would encourage profit sharing plans for unions in major industries such
as automotive. I would also give tax breaks to corporations that install programs of employee profit participation. When everyone has an interest, everyone takes responsibility.
Done with Chrysler and soon with GM and others. I suggested this last November to bring employees into ownership of corporations (profit sharing) so they could share in the results of their labors. This would give them an incentive to produce better products. Well, the President has done this with Chrysler for the wrong reasons, but he did it. Chrysler employees now own 55% of their company (which I did not recommend) but they will share in profits (which I did). It may be too late but we’ll see what happens. At least the quality of the work from union workers should now improve.
19. I would give no more money to Detroit until the Big “3” comes up with a
plan to regain the confidence of American consumers. The cars are good cars and the mileage is impressive but the overriding problem today is the lack of confidence in these cars that is expressed by the American buyer. Unions have to share in the responsibility for these cars and their reliability. By holding union members directly responsible for the work they do, you will improve that work. Filing grievances every time a worker is called to task is counter-productive. This is why profit sharing with employees is such a good idea. It gives everyone an incentive to do better work.
Same as above. Now they are doing it for Chrysler and soon profit sharing will be introduced at GM. This is good because workers should share in the success of their companies. They will now also share in the failures by losing their jobs. This is a risk of ownership.
11. I am going to level the playing field every way I can for American workers to compete in the global economy. Tariffs and protection don’t work so we have to find creative ways to reach our goal. These are some steps to move us in that direction. There is a symbiotic relationship between employer and worker and they need to work together to be successful.
Class warfare is counter-productive and dumb. It’s one country and we all are better off when we all do well.
I couldn’t say it today any better.
12. Increase the minimum wage immediately by $1.50 an hour.
Nothing on this yet but it will come.
13. Extend unemployment indefinitely until the jobless rate is down to 5.0%. Also increase the unemployment payments by 25%. This will keep our economy stable until it can recover. The cost is about 150 billion dollars a year, far less than other programs proposed.
Partially done. Many states have extended their UC benefits into next year and they have also raised the amount. Not by 25% but by $25.00 a week or $100.00 a month. So it’s a step in the right direction and at least they did what I suggested if not quite as much as I suggested.
Then let each person get back to managing his own life.
This they have NOT done and very likely will not do unless and until they bankrupt our economy.
So these are a few ideas. There are others. Some may be too ambitious and may have to be modified, some are perhaps foolish and would never work, but all of them offer something to be considered. Some may also be good ideas.
To bring America back, we need to accomplish two things: (1) put federal resources to work for our economy and (2) let the market correct itself wherever possible. We need both but too much of either right now would kill us.
Joey
Articles in Joey’s Comments and Controversy are the express opinions of Joey and not boomeryearbook. However, while non-members can read articles on boomeryearbook.com only members can make comments. Joey’s section is called Joey’s Talk and Controversy for a good reason. In Joey’s words, “I hope I’ve given you food for thought and you will join boomeryearbook and respond”.
www.boomeryearbook.com is a social networking site connecting the Baby Boomer generation. Share your thoughts, rediscover old friends, or expand your mind with brain games provided by clinical psychologist Dr. Karen Turner. Join today to discover the many ways we are helping Baby Boomers resolve elderly problems. Baby boomers changed the world. We’re not done yet!
Boomer Yearbook is Psychological Articles for Baby Boomers. Connect with old and new friends, or expand your mind and ward off senior moments and elderly problems with dream analysis and online optical illusions and brain games provided by clinical psychologist Dr. Karen Turner. Join other Baby Boomers to stay informed, receive weekly Newsfeeds, and let your opinions be heard. Baby boomers changed the world. We’re not done yet!
My Program For Economic Recovery
Monday, June 29th, 2009Baby Boomers Guide to Economic Recovery
By Joseph J Kusnell for Boomeryearbook.com
Originally written: November, 2008 – Comments added (in red) April 2009.
My Program:
In a moment, my ideas for affecting an economic recovery. But first:
Washington is spending a lot of money to save our economy but I wonder if they have any real idea what they are doing. They just gave away more money that I ever knew existed in the world and what did they get for it – nothing. Banks instead of using the money to make loans used it to make their balance sheets look better. Call it self-preservation. The car companies came and took billions with absolutely no plan whatsoever to overcome the problems that have put them in this situation in the first place. Sure they want to market new cars. But is it the cars or the companies that are the problem? Do they know that most Americans have no confidence in their products? Do they know most Americans don’t trust their products? They better solve that problem before worrying about more new cars. And once they make dependable good cars, they can insist their employees drive what they build. No more cars in the Big “3” parking lots that are made outside the US. If you want to drive them, go to work for them. We’re getting serious about survival.
And what about all this political mess with cabinet appointees with no experience taking over huge government agencies and one appointee after another having to step down for misconduct? Since when is that a good thing?
And while I am on the subject, there were also the problems of the former NJ Democratic Governor, the former NY Democratic Governor, the current NY Democratic Governor, the current NM Democratic Governor, the guy they wanted to be Secretary of the Treasury who had to withdraw because he didn’t pay his taxes , the Democratic woman from Maryland who was also in trouble with the law, Democratic Representative Alcee Hastings, the former Democratic Federal Judge who was impeached and removed from office, Representative William Jefferson, Democrat found with 90 thousand dollars hidden in his freezer, Tom Daschle Democratic nominee for Health and Human Services who had to withdraw his name because he hadn’t paid his taxes, Democratic Representative Charles Rangel who as Chairman of the (tax writing) Ways and Means Committee forgot to report $280,000.00 in income for each of eight successive years and John Edwards who was a Democratic candidate for President who had to withdraw because he was caught cheating on his wife who has cancer. And that’s not all of them but you get the idea. It’s really a good thing we elected Democrats to straighten out America.
Okay, let’s move on past that mess. So what can we do to fix this economy? Well for openers, let’s remember that the Democratic Party that now owns Congress is the party of Bill Clinton, Franklin Raines, Jim Johnson, Chuck Schummer, Barney Frank and Chris Dodd not to mention ACORN. And who are these people? Why these are the people that caused this mess in the first place. They should all be in jail for what they did to America and to the world’s economies but instead the voters entrusted them with the job of straightening out this mess. Sure there was also corporate greed that took these high interest rates and ran with them but it all started with the Democratic partisans mentioned above. They did this to us. Clinton is saying today that Bush could have done something about this but he conveniently forgets that both George Bush and John McCain tried to get congress to reign in Fannie Mae but the Democratic congress (and Democrat Maxine Waters) wouldn’t hear of it. Maxine said it was ‘racism’.
No folks, it wasn’t George Bush that did this, it was this nefarious ‘gang of six’ that did it. They abused Fannie May and Freddie Mac then they took huge political contributions from them. Just as they did from AIG. They were nothing but payoffs. Then they arranged to give mortgages to millions of people that couldn’t afford them and could never hope to pay them back. Then they were guilty of conflicts of interest by chairing banking committees that were supposed to oversee both Fannie and Freddie while instead, they looked the other way and took political contributions from them. Tell me, how do you oversee people from whom you have taken political contributions? The answer is, you don’t.
So they took the money from Fannie (a million to Obama, 800K to Dodd, 500K to Frank), plus Jim Johnson got a 21 million dollars golden parachute and Franklin Raines got 41 million and Obama smiles and looks the other way.) And nobody yet has seen Dodd’s mortgage papers he promised to produce for us when he was accused of taking a “sweetheart deal” from Countrywide. That’s what these people did and none of them are going to jail when all of them should be. That’s because they are all democrats and the American People foolishly gave them control of all of us.
So we are stuck with them and now, we have to try to get it done anyway. We have to save our country, if not the world, despite these clowns. So, here are some ideas that may help. Maybe they won’t but as the man said, “I have to try”. So here goes.
(This article was written back in November 2008. I am now adding comments in bold beneath each of my suggestions from that time. Today is May 9, 2009.)
1. Immediately set a 4.0% standard maximum interest rate for all new or refinanced mortgages. Extend available terms to 40 years. Making this new lower interest rate available to everyone will act as a superior economic stimulus because people at all income levels can refinance putting many hundreds of dollars back in their pockets each and every month from this day forward for years. In most cases, this will create a stimulus of thousands of dollars annually for all taxpayers and it will encourage employment. Although some lenders may complain, remember folks it’s better to get a guaranteed 4.0% than 0.0%. Massive homeowner default is what we are fighting now so we need to do what we need to do. Add it a tax credit for 1st time homeowners and we are on the way to recovery. This is Step #1.
Done. All three ideas have now been incorporated in our economic recovery plan, most of them in 2009. They include the lower interest rate on existing mortgages, the lower rates for refinanced mortgages, and an $8,000.00 credit for first time homebuyers.
2. For people who are upside down in their mortgages and can’t pay them regardless of Step #1, let them walk away with a check for $2500.00 specifically earmarked for 1st, last and security payment for a new apartment. If they are going to lose their homes, they still need someplace to live so we have to take care of that. We put them in and then it’s up to them to find a way to survive. That’s life. Once they are out, we put the foreclosed home on the market at the current price with a 4.0% mortgage and terms up to 40 years and we will surely sell them. This approach will also stimulate the real estate market and that should help. (And yes we can do this. We have had price and wage controls in the past when we thought it was necessary so this is necessary today.
Partially done. They didn’t quite do this but they introduced Mortgage Modification and Mortgage Forgiveness for these people which mean the same thing. I think my way would have been better but these ideas accomplish the same goal.
3. I would skip the cash rebates to taxpayers. Step #1 will replace that.
If they insist, than rather than giving cash, give credit in some form that it has to be spent and not saved or used for paying bills. That way it may stimulate the economy although in my opinion, I don’t think a single stimulus payment can do that. We need to try something different.
They ignored this step and sent out another, but reduced, stimulus check.
3. All bailout monies must be used for the intended purpose and cannot be diverted to any other institutional use. If it is to be put back into the economy, then that’s how it must be used. We need control on our bailout money under pain of penalty.
Done. U.S. Senator Claire McCaskill (D-MO) and Chuck Grassley (R-IA) introduced a bill that will significantly strengthen oversight of the $700 billion financial rescue plan. It’s a start.
4. Eliminate all capital gains taxes for the foreseeable future, Also, reduce all corporate taxes by the same percentage that the corporation employs American workers as part of its worldwide work force. This will encourage hiring of American workers.
Nothing done on this. Still waiting but not likely. This administration is anti-corporation which I fear is going to cost us jobs.
6. Remove health care costs from corporations. A national 1-2% sales tax
can be instituted to pay what corporations used to pay if that’s what it takes but we have to do something to take that non-business cost out of businesses. This will remove expenses that are no part of their businesses and will enable them to become competitive, selling more of their products, hiring more people which in turn will generate more tax revenue because of higher employment, which is what we need. Health care is a business in itself and must be treated as such.
Done. The government announced this month that health care costs would be taken out of GM and Chrysler and absorbed by the US government. A precursor, I assume, for a national health care program but it is what I think must be done. We must remove health care from the costs of running a business as other countries have done. This program will be expanded in the future.
7. Establish national caps for the payment of CEO’s of publicly traded companies no matter the form of the payment (i.e. expense accounts, stock options, and bonuses). The cap should be a multiple of the average salary of the average employee of that corporation as computed by the Labor Department. I would suggest a multiple based on the number of employees of the corporation with that cap ranging from 100-1 to 500-1. So the CEO of a company with 500,000 employees that earn an average annual wage of $50,000.00 would be entitled to compensation of 500-1 or twenty-five million dollars a year, each and every year. To earn more, he will have to raise the average salary of his employees giving him an incentive to do just that.
Done. The Government has established caps for CEO compensation. It has to become a national policy but this is the first step. I hope it is done voluntarily by corporations but this time it was done by the Federal Government with the banks that got bailout money. Again, it’s a start.
8. I would also institute a confiscatory income tax such as we had in the 60’s and the 70’s. That means that taxation on income over a certain figure per annum would be increased gradually to 70%. As an example, if the CEO was paid over 1 million a year and less than 5 million, the tax would be 50%. Between Over 5 but less than 10, would be60%. Ten and over, the excess would be taxed at 70%. Under one million would be at the normal rate. This permits people to get rich but not filthy rich. No individual needs or can use 15 homes or three airplanes. Let’s get real. (I have lowered the sample numbers from the original but in truth, the lawmakers would decide the actual numbers. So these numbers are solely used as an example.)
Being talked about but nothing done yet. I do think in the next year the maximum tax rate for our wealthiest citizens will be dramatically increased.
9. I would encourage profit sharing plans for unions in major industries such
as automotive. I would also give tax breaks to corporations that install programs of employee profit participation. When everyone has an interest, everyone takes responsibility.
Done with Chrysler and soon with GM and others. I suggested this last November to bring employees into ownership of corporations (profit sharing) so they could share in the results of their labors. This would give them an incentive to produce better products. Well, the President has done this with Chrysler for the wrong reasons, but he did it. Chrysler employees now own 55% of their company (which I did not recommend) but they will share in profits (which I did). It may be too late but we’ll see what happens. At least the quality of the work from union workers should now improve.
19. I would give no more money to Detroit until the Big “3” comes up with a
plan to regain the confidence of American consumers. The cars are good cars and the mileage is impressive but the overriding problem today is the lack of confidence in these cars that is expressed by the American buyer. Unions have to share in the responsibility for these cars and their reliability. By holding union members directly responsible for the work they do, you will improve that work. Filing grievances every time a worker is called to task is counter-productive. This is why profit sharing with employees is such a good idea. It gives everyone an incentive to do better work.
Same as above. Now they are doing it for Chrysler and soon profit sharing will be introduced at GM. This is good because workers should share in the success of their companies. They will now also share in the failures by losing their jobs. This is a risk of ownership.
11. I am going to level the playing field every way I can for American workers to compete in the global economy. Tariffs and protection don’t work so we have to find creative ways to reach our goal. These are some steps to move us in that direction. There is a symbiotic relationship between employer and worker and they need to work together to be successful.
Class warfare is counter-productive and dumb. It’s one country and we all are better off when we all do well.
I couldn’t say it today any better.
12. Increase the minimum wage immediately by $1.50 an hour.
Nothing on this yet but it will come.
13. Extend unemployment indefinitely until the jobless rate is down to 5.0%. Also increase the unemployment payments by 25%. This will keep our economy stable until it can recover. The cost is about 150 billion dollars a year, far less than other programs proposed.
Partially done. Many states have extended their UC benefits into next year and they have also raised the amount. Not by 25% but by $25.00 a week or $100.00 a month. So it’s a step in the right direction and at least they did what I suggested if not quite as much as I suggested.
Then let each person get back to managing his own life.
This they have NOT done and very likely will not do unless and until they bankrupt our economy.
So these are a few ideas. There are others. Some may be too ambitious and may have to be modified, some are perhaps foolish and would never work, but all of them offer something to be considered. Some may also be good ideas.
To bring America back, we need to accomplish two things: (1) put federal resources to work for our economy and (2) let the market correct itself wherever possible. We need both but too much of either right now would kill us.
Joey
Articles in Joey’s Comments and Controversy are the express opinions of Joey and not boomeryearbook. However, while non-members can read articles on boomeryearbook.com only members can make comments. Joey’s section is called Joey’s Talk and Controversy for a good reason. In Joey’s words, “I hope I’ve given you food for thought and you will join boomeryearbook and respond”.
www.boomeryearbook.com is a social networking site connecting the Baby Boomer generation. Share your thoughts, rediscover old friends, or expand your mind with brain games provided by clinical psychologist Dr. Karen Turner. Join today to discover the many ways we are helping Baby Boomers resolve elderly problems. Baby boomers changed the world. We’re not done yet!
Boomer Yearbook is Psychological Articles for Baby Boomers. Connect with old and new friends, or expand your mind and ward off senior moments and elderly problems with dream analysis and online optical illusions and brain games provided by clinical psychologist Dr. Karen Turner. Join other Baby Boomers to stay informed, receive weekly Newsfeeds, and let your opinions be heard. Baby boomers changed the world. We’re not done yet!
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