A Triage Program for the US Economy -- some initial thoughts
There are two articles on transitional programs for the US Economy. This one focuses on the immediate financial crisis and its results.
The second article is called "Government Transitional Program for a Metric Economy", this piece addresses issues directly related to creating a Metric Economy. Naturally, the two themes are interconnected, you cannot move to a healthy metric economy without dealing with the issues of the present recession, and you cannot get out of the present recession with business as usual, we need a radical new alternative to the present economic system or we will end up again with the same problems of greed and recklessness.
IMMEDIATE CRISIS ISSUES
Take Back the Money
Take back the monies given to financial corporations. Redistribute it on the basis of real need and compliance with goals of helping homeowners and a plan for the overall health of the financial system.
Stop Foreclosures, Help Homeowners
Cease all foreclosures now. Return ownership to occupants. Discharge all penalties and debts and taxes to homeowners.
Create house buying incentives. Create affordable housing programs. Develop programs for collective home buying to reduce prices. (Use collective buying programs in general to reduce prices for citizens.)
Control Land Prices
Land is one good that violates the laws of supply and demand. As Will Rogers said, “God is not making any more of it.” Land is always in short supply creating an artificial situation of very high demand which ceaselessly drives up pricing. Because land is not a normal market it must be regulated, controls should be put on land prices, and this benefits homeowners and businesses alike.
We can go even further if we like and reduce land prices to zero, and hold land in common as we do other national resources. Land would then be distributed by first-come-first-serve application, by lottery, by need or some other method or combination. Policies, regulations and penalties can control opportunists who try to take advantage of a situation.
There is no logical reason to give land a price, if we hold it in common. Land should be considered a sacred trust managed by an ethical steward.
When land prices are half or more of one’s property assessment, this can be a huge boon for citizens and business. Since construction price rise is often associated with the warped supply and demand relationship of land, we must also control it too.
Right to Own a Home
Combined with the above idea is the Human and Constitutional Right to own a decent home. People should not be driven from their homes by foreclosure, everyone deserves access to a home at whatever economic station.
Stop Bonuses and Huge Salaries
Cut or eliminate bonuses and salaries and other compensation for CEOs and executives of financial companies
Reorganize the Banks and Financial Industry
There must be a government takeover of the financial industry. Some companies must be allowed to fail, others can be combined. Some banks will survive as they are. Some types of financial institutions must be eliminated, new kinds must be created. The goal is a solvent financial sector. Eventually, put banks and other firms back out onto the market, we should not create a socialist banking system.
Establish a New Federal Reserve with New Policies
A new central bank will work closely with local banks bringing much needed funding to their operations, leading to cash directly into local economies. “Local investment banks” will be created or “Combination banks” that take funds from the new Fed and local banks to connect together money, entrepreneurs, management and skilled and unskilled labor and with materials and other resources too.
Job Programs
Through Federal projects and the use of Local Investment Banks create millions of jobs that are real, productive and long-lasting.
Cash and Credits
Give cash and credits to the poor, working class and middle class, this includes long term unemployment insurance and assistance moving to the areas where there are jobs.
The rich have had their gifts and it is morally wrong to deny the “lower” classes their aid too.
Collective Buying
Establish collective buying programs in general to help people get goods and services at reduced costs. This can apply to anything. Consider the People’s Walmart, a coop or democratic corporation owned by members buying items at a huge discount.
New Type of Healthcare System
Universal healthcare is a moral imperative in the USA. Here we have a market that has failed us, so it is ethical to try something new. Current attempts are aimed toward controlling prices at the distribution end of the healthcare industry, that is, with insurance companies. One should also direct attention to the production or manufacturing end of the problem. Here we have makers of drugs, MRI machines, blood test machines, supplies, tools, scalpels and so on that sell goods at extremely high prices. If we are to get a handle on the current cost problem, manufacturing needs some treatment. This would involve a general program of breaking up monopolies, giving tax breaks for investment and R and D, giving government contracts to firms that produce cheaper quality products, limiting patent periods and so on. What has happened is the market mechanism is not operating well in the production end of the healthcare industry, so what we need is more competition, more investment, more research, more innovation. This will then drop prices and bring us more machines, drugs and supplies that are cheaper and of good quality.
Overall, what we are going to have is a healthcare system that is part of profit and part nonprofit. Nonprofit to get healthcare to everyone, and profit to reduce the prices of that healthcare.
Taxation Changes
Higher taxation of big business and the rich. Fortune 500 firms pay no tax due to the loophole system. While wealthy individuals pay tax, their rates are not high enough. It should be understood that the difference between an ordinary person and a rich person is that food, utilities, gasoline, clothing, shelter are not discretionary, they are necessities in danger of cuts. The rich do not hurt on the fundamental survival level; raising taxes on the “sub-tariat” (the classes below the rich) will cause severe problems of need. Raising taxes on the rich will not cause a crisis of basic need, it will cut into luxuries.
A gradual program of tax increase over a decade or more upon the big corporations and the wealthy is in order. It can be eased in during this downturn; the primary idea is psychological, that the privileged begin to accept their obligations to the nation, and we can return to a time when they did pay a fairer share for example in 1960 when corporations paid for 27% of the Federal budget when now they pay less than 9%.
Cut Waste, Find the Cash
Cut waste in the Federal budget, eliminate all giveaways to corporations, cut bureaucratic waste, and end war spending and pointless adventures in the Mideast.
War Bonds for the War on the Recession
The old war bond was sold to help fund the World War Two war effort. The present war bond is sold to citizens and companies who wish to invest in the programs to pull us out of our economic malaise. Specific war bonds can be created for housing, poverty etc.
This is another source of desperately needed cash.
Call for a National Bankruptcy
Declare a national bankruptcy as a Reset tool. Allow all citizens and companies to participate. Set the issues for discharge and the amounts. Relieve the nation of unmanageable debts. This will result in a better financial situation for most, except the financial industry for it holds most of the uncollected debt. But then again it is insolvent anyway, so let us reorganize it.
Rationing
Yes, rationing. By this is meant rationing of resources, goods and capital in order to win the war on a recession. Specifically, there will be controls put on frivolous spending by consumers, though the recession has cut into much of that, we do not want future resurging purchasing to go toward unessential production, the nation’s economic future is at stake so priorities must be made. This also applies to the use of resources and materials, and to the ranges of capital investments. This concept here is based upon an assessment of a severe economic situation not a temporary recession, that this nation is in a struggle for its very economic survival. This issue relates to the discussion below of mortgages, banking, consumerism and the old credit style economy.
Abolish Mortgages
This notion has been saved here for the end: Why not Abolish Mortgages altogether?
Sound crazy? Not really. If we have determined that land should not have a value, and that construction costs are warped and must be controlled or reduced, then we have essentially ended the conventional mortgage.
Consider that banks and mortgage companies make most of their profit from false pricing of land and construction. This is a transfer of wealth monthly from you to them. The financial firms then bundle your mortgage and sell it as a mortgage-backed security at a discount to get immediate cash. They then use this cash to create more lucrative mortgages. This is the cycle of the mortgage economy. And this cycle transfers wealth at a dizzying speed from ordinary people to corporations and the rich.
If we abolish mortgages and only allow reasonable construction loans for the future, we will have made a move to a rational and ethical economy. Should we do it all at once? Probably not, because the shock of no mortgage payments would collapse the financial system immediately. But what we can do is stage the process so that, say, over 10-15 years we reduce payments on mortgages to zero. This gives financial companies the time to reorganize. They will have a window to set themselves up on a new basis.
Yes, this will cause losses for these institutions and shareholders but we have no choice. This sector is in serious trouble anyway and is essentially defunct and needs serious restructuring. Now is the time to be bold and follow through on the logic of economic history and create something very new. Why fix this problem later when we have suffered so much already because of it, why wait for another collapse in 20 years and go through this again?
There will be big gains for consumers and businesses as their mortgage payments decline, monies will be used for new purchases and savings. The real issue in any major economic reorganization is who will gain and who will lose. In this case it will be the consumers and not the predatory lenders.
This raises the issue of what kind of economy we are heading to.
For a Post-Mortgage, Post-Consumerist Economy
Banking must be restructured on a new basis. But this leads us to ask what kind of economy we will want once we have much more cash available, because it is not transferred to Wall Street in a process designed to get still more cash out of us.
America should give some thought to this. The wisest solution is to get out of our addiction to credit and consumerism. Once we have more real wealth at home, what shall we do with it? Homes will be cheaper. Taxes upon corporations will be higher, so your taxes will be lower.
If we launch again into another version of consumerism, that would be a mistake. It is time think about the fundamental and real values of life, instead of amassing closets of toys, buying larger and larger houses, or more expensive cars, or so on.
Consider a “Self Growth” economy where individuals develop themselves as human beings – where we attend continuing education throughout our lives, where we travel, where we learn about diversity and multi-culturalism, where explore and learn about our own emotions, psychologies and identities, where we seek the philosophic and spiritual, where we learn to be creative, where we expand our thought methods and skills, and more...
Such an economy would be much more satisfying and rewarding than a consumerist economy of goods and things and toys.
Also, consider a “Giving” economy where people give time and energy to help others, to help Nature and the environment, to help less fortunate people around the planet. And giving also would mean giving money in the form of charity or voluntary higher taxes to solve some social or environmental problem. Further, in a giving economy, people would save more and these funds could be made available for others as loans for self help.
A new economy of Self Development and Giving would be an interesting change
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