A Progressive Economic Recovery Package

[Prophet 451]

I'm not an economist and I make no claims of expertise in this area (beyond the fact that my mother's an accountant) but, to my admittedly non-expert mind, here's a proposal for how to save the economy.

- A big tax break for the working poor. The working poor tend to spend everything they have, pumping the money straight back into the economy, thus providing stimulation.

- Slightly smaller tax break for the middle class. Obama's already pledged this.

- Tax hike on the rich. The exact amount will vary, naturally, but I envisage it rising to 50% on incomes above one million dollars. The exact figures can be debated but it seems unfair for it to go above fifty percent. Contrary to popular right-wing propoganda, that doesn't remove the incentive for the rich to work because half of a fortune is still a fortune.

- No need to raise corporate tax, just close the bloody loopholes that let the majority of American corporations avoid paying them.

- A massive cut, at least 25%, in military spending. Guys, the US spends more on it's military than the entirety of the rest of the world combined. Your yearly military budget increase alone is more than the entire military budgets of your next eight competitors. This is the biggest buildup of disproportionate power since the fall of Rome and it's largely unnecessary. The world (outside the MidEast) is moving away from large-scale inter-nation war and toward information-led small-scale interventions. As far as value for money goes, the military makes Enron look like a paradigm of scrupulous accounting. Just eliminating the obsolete weapons programs alone would save around $70 billion a year.

- Full civil unions. Why does this affect the economy? Two reasons: Firstly, getting married (or "unionised") is big business. As "Prop 8: The Musical" put it, "think of all the carriages and four white horses". Secondly, because married (or "unionised") couples spend more than two single people do. Thirdly, and outside the economic area, if full marriage for our gay brothers and sisters is currently off the table; the very least they deserve is full civil unions with the same legal rights as a stopgap.

- An updated and expanded G.I. Bill. Reasoning can be found here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8073257

- Universal Healthcare. There are three reasons behind this one:
- 1. The need to pay for the private healthcare of their workers creates a tremendous drag on American businesses. As has been kicked around endlessly lately, foreign automakers have smaller overheads than their American competition because they don't have to provide for their employee's healthcare. Their employees are also more productive because when healthcare is provided free of charge, you go to the doctor as soon as you get sick and, in most cases, you're back at work in a couple of days. In contrast, if you're worrying about the cost of healthcare, you avoid seeking medical attention until you absolutely have to and as a result, you're off work for weeks (this doesn't include stubborn men who refuse to see a doctor until they're bleeding from the eyes, of which I am one).

- 2. It's cheaper. Seriously. The combination of Medicare, Medicaid and private insurance currently costs Americans around $2.3 trillion a year (figures from Wiki) and still leaves massive numbers uninsured. Private insurance companies spend 20-30% of their expenditure on administration. The NHS (which I live under) spends about 6% on administration (including benefits and pensions) and covering the entire US population under the NHS model would cost around $600 billion a year. Now, the NHS is a long way from perfect and other nations do parts of healthcare better but since the US is coming to this late, there's nothing to stop you examining the current systems and then mix-and-matching parts, absorbing Medicare and Medicaid along the way, until you come up with something special and uniquely American.

- 3. Public works. Setting up universal healthcare is a massive expenditure (although, as noted above, it's far cheaper to keep running) but, importantly, it's expenditure which creates jobs. A USHS (for lack of a better term) would need hospitals, roads to connect them, ambulances. That large sums of money going into the construction and auto industries. Once they're built, you need to fill them with beds, medical equipment, a canteen, maybe a newsagent. All of that is more money going into those trades. To staff hospitals, you don't just need doctors and nurses, you need admin staff, IT professionals, pharmacists, cooks and serving staff for the canteen, janitors, groundskeepers. Many of those are specialised positions but many (janitors, serving staff, maybe someone to run the newsagent) are entry-level positions that can be filled by unskilled workers i.e. new jobs for the jobless, another way to stimulate the economy.


So there you have it. I haven't dealt with import/export tariffs because I'll be the first to admit that I don't understand them and I'm sure there's some areas that would need adjustment but in general outline, it's my honest belief that this plan could turn the economy around. Of course, the right would fight it every step of the way, especially the healthcare part (due to their article of faith that government can never help people) but the deliberately obtrusive cannot be allowed to bring everyone else down with them.

[leftstreet]

1. Higher wages for the working poor, rather than 'a big tax break'

:shrug:

[Prophet 451]

2. We can do both

Any extra money put in the pocket of the working poor achieves the same effect so we can combine the tax breaks with a big raise in the minimum wage (I'm thinking somewhere between ten and twelve dollars an hour).

[leftstreet]

8. $15 an hour at the very least (here in the West anyway)

:thumbsup:

[Prophet 451]

9. Well, can we do it state-by-state?

I'm not sure if it's practical but the thing to do seems to be to set an across-the-board standard of, say, $13 an hour and then say that certain states where the cost of living is higher, have a supplemental rate to bring them up to, say, $16.50 an hour.

[anonymous171]

3. Civil Rights must be put on the back burner.

Otherwise the entire package is doomed to fail. FDR had to it, so will Obama. Repealing DOMA and desegregating the military (DADT) would be a better bet.

[jwirr]

4. The working poor pay minimal taxes. They are more likely to get

earned income credit for working. It could and should be raised.

[Prophet 451]

5. OK, we can do that

Combine that with the hike in the minimum wage I mentioned upthread and we achieve some real progress toward economic justice while rebuilding the economy.

[Stellabella]

6. I'd also like to see a nationwide cap on consumer rates.

Hold mortgages at 5-6%, credit cards at 8-9%, cars at 3-4%.

Or thereabouts. I don't really care what the number is, but it should be much lower than it is now. And fixed, no matter what your credit rating.

And halt foreclosures. After all, don't we pretty much own the banks now???

Those are all really good ideas you have.

Of course, the idea I like best, but one that won't work, is to give a couple hundred grand to every adult American. That would be less than the trillions the banks are absorbing, and really would stimulate the economy and solve the housing crisis.

[Prophet 451]

7. I like that idea

But you're right, it wouldn't work in practice.

OK, let's try this:
- Moritorium on foreclosures, to be re-evaluated after six months. Cap mortgages at 6.5%, credit cards at 8.5%, cars at 5%. In addition to that, institute a new rule that any charge leveled on your credit or bank accounts (i.e. for bouncing a payment) cannot go above a certain figure (I'm thinking around $15). We instituted something similar on credit cards here last year and it's had a massive effect.

[terisan]

10. II nominate you for chief economic advisor. nt

[Prophet 451]

11. I humbly accept, sir n/t