Posted 12 years ago on Sept. 30, 2011, 1:25 p.m. EST by jblen536
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The SILVER BULLET STIMULUS PLAN
There’s a misconception if the politicians increase taxes on the rich or give businesses and individuals finite tax breaks, the economy will recover. Not so.
The Feds have spent billions feeding the monster they created (the financial sector) (http://www.marketwatch.com/story/financial-sector-spent-5-bln-lobbying-dc?dist=msr_10) and rescued with our tax dollars. What has this action done for the economy? Zip.
You CANNOT create long-term sustaining jobs without generating a steady stream of long term money back to the street. The consumer is the key to creating demand for products and services and, in following, creating jobs by creating demand for employees. You MUST put money back into the pocket of the consumer without it being a temporary government hand-out.
The Silver Bullet Stimulus Plan will not only generate a steady stream of long term money back to the street, it will redirect multiple revenue streams back to the government (read we-the-people) and rather than increase debt as opposed to tax increases and breaks, decrease federal debt.
So how do we get money back into the pockets of the consumer? And where does this money come from if not from the government?
The financial sector has siphoned off trillions of dollars from the middle-class (the street) and continues to increase the diversion of money off the street and into their coffers, daily. For the economy to recover, this has to stop.
In The Quiet Coup, Simon Johnson points out: From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. (http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/)
Mortgage lenders are refusing to lower rates “because, simply, they don’t have to. Lenders have raised their profit margins by 1.5 to 2 percentage points in the past month, according to Infroma Research Services, by offering borrowers slightly higher rates.” (http://www.smartmoney.com/borrow/home-loans/lowest-mortgage-rates-are-hard-to-get-1315320975909/)
These are desperate times. We need desperate measures. It will not only take a jolt to get the economy back on its feet, but continued long-term life support to keep the economy moving forward.
So what if we-the-people (the government) were to step in and make an offer to refinance ALL current primary home mortgages at 3% without any restrictive qualification other than the homeowner has been making his/her payments at a higher interest rate. What would happen?
Let’s take a look.
1) Government would redirect the revenue stream (at 3%) from the financial sector into its coffers through the foreseeable future. (Financial institutions would have the option to keep this revenue stream, but only by matching the government’s 3% offer.)
2) Government would increase its income tax return because now homeowners will have less of a mortgage interest write-off. (another redirect of revenue from the financial institutions)
3) At least for the first year, financial institutions will pay higher taxes on their surge in profits due to the government paying off of mortgages.
4) Home owners – numbering around 75 million – will, for the term of their mortgage loan, receive the equivalent of a monthly pay raise. (revenue stays on the street instead of going to the financial institutions) 5) It would be expected some home owners, with additional monies in their pockets, will pay down or off credit cards. Another redirect from the financial institutions and additional money staying on the street due to drop in interest payments. 6) It would be expected home owners would use their ‘pay raises’ to purchase products and services, creating a demand for employees. 7) It would be expected a certain percentage of elderly home owners would now be able to retire, which will add open jobs to the job market. 8) More workers due to job creation, more income tax flowing in to the government coffers and less government assistance flowing out = earlier pay down on federal debt = less taxes needed to pay interest on debt over long term. 9) Increased consumer confidence generated as the economic wheel not only receives a jolt, but sustains support throughout the term of the mortgage loans = a release of tied up funds = more consumerism = more taxes flowing into government coffers. (30 years?) 10) Stabilize housing market as all qualified buyers will know they can buy a 30 year mortgage at 3% either through the government program or financial institution.
Let’s make it happen. Forward this to your representatives in Washington, to your friends, neighbors, family. Act now, before it is too late. “…recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.” The Quiet Coup