$3,500 prepaid debit card to every adult in a tax-filing household

[Kurt_and_Hunter]

You cannot bank or invest the money, but it can be used for anything a credit card can be used for.

Expires in six months.

Probably cheaper than the first stimulus.

Would create three big GDP quarters. (The third one an inventory re-build quarter)

Fed sets 3.5% inflation target for two years at the same time.

Maybe something gets kick-started... maybe not.

[BrklynLiberal]

1. Call the White House with that idea!!!

:thumbsup:

[EC]

2. I was thinking along the same lines but

at $5000.

[Kurt_and_Hunter]

5. Funny thing -- I wrote the OP at 5,000 then changed to 3,500

I was trying to guess how many adults there are in tax filing households and picking a number out of the air that was probably cheaper than the first stimulus.

[BadgerKid]

3. How much is deducted for non-use?

: cynicism :

[diveguy]

4. my thought too

you want to kick off the economy, give people the money to spend. We, being people would have no problem spending it. And the gov would get a bunch back in the sales taxes.

[Hawkowl]

6. Paid for by letting Bush's tax cuts expire.

At least letting them expire for those making above $250,000 per year.

[taught_me_patience]

35. edit-self delete

[DJ13]

7. You expect the Wall Street crowd to have to work to get the money?!

I mean, they would actually have to EARN IT by selling stuff, they wont like that since they normally get the money directly.

[aquart]

8. But if everything you buy is an import?

That ends up boosting China more than us.

[earthside]

19. Bingo.

After everyone has bought their Chinese-made electronic toy, their Guatemalan-made shirts, their Korean-made shoes, their Mexican-made toaster ... then what?

If all we are 'stimulating' is buying imports, then after the $3500 is gone -- we are right back where we started -- that is the sad lesson of 'cash for clunkers' and the home buyer's tax write-off.

Sorry, folks, but this is not the 1930s; we will get nowhere "fighting the last war."

We need Pres. Obama to announce immediate renegotiation of trade agreements, we need a plan to incentivize new manufacturing here, and a tariff program to make U.S. made goods competitive with foreign-made goods.

Then, maybe, small businesses and consumers might begin to have some confidence in the future and be willing to hire and spend.

But more 'free money' is not going to solve the problems plaguing this economy.

[Mnpaul]

39. That is the whole problem

Until we fix the trade deficit, neither tax cuts nor increased spending will work. Either way the money quickly moves out of the country.

[JuniperLea]

9. It can't go to Republicans though...

They hate that kind of thing. We shouldn't subject them to that. I'm quite sure they all sent back the stimulus checks their buddy W sent out too. Yep. That's the only honorable thing to do... we need to bring back the honor, donchano.

[femrap]

10. I assume this money is

coming the accounts of the top 1% and goes to only those making less than $30,000.

[northzax]

12. nah, goes to everyone

best way. since it's a prepaid card, even the rich who might save cash would spend it.

[femrap]

40. Oh gee. Let's give

the rich some more money.:sarcasm:

[femrap]

41. Oh gee. Let's give

the rich more money. They really need it.

[SlipperySlope]

11. Reminds me of "red currency"

Red currency is a myth that goes like this...

One Monday morning the government announces that in six months the old green currency will no longer be honored. Only the new red currency will be negotiable. Everyone has six months to either spend or convert their old green currency.

Most people; this is no big deal. Electronic money in the bank isn't affected, only physical currency is.

But, hypothetically, there are people sitting on hoards of cash out there, and those people don't want to be forced to go to the bank to exchange it because it would create a tax record. So, hypothetically, those people just go on a spending spree instead.

The theory behind the myth is that forcing a currency color change (with a date where old currency will no longer have value) would create a wave of stimulus all by itself.

[Kurt_and_Hunter]

15. A side effect of what is usually considered as an anti-crime measure.

This was done in myth/con-man form in Russia when we changed the $100 bill a few years back.

It was put out there that the old bills would expire. Many Russians have their life savings in American $100 bills and were conned into selling them at a discount for the new bills.

Sad.

[Maine-ah]

49. well, then they could just deposit their cash

and in six months it would be red currency...right?

[SlipperySlope]

50. Right, but...

Yes; most people could deposit their cash and have it automatically turn into red currency.

The theory is that there are people out there with large piles of cash who do not want to deposit it because that would create a record of the money. Those people would be forced to spend it instead...

[JVS]

13. I'd either use it to pay bills (and then bank the money I would have used on bills) or buy a...

shitload of scotch and bourbon.

[LiberalFighter]

16. About the only thing I could use it completely would be to

pay off part of my mortgage.

[Baalath]

14. What would be wrong with banking the money?

[Kurt_and_Hunter]

17. Negligible stimulative effect. Same reason tax cuts for billionaires have

minimal stimulative effect... it just gets added to bank reserves.

A person could, of course, bank the cash they saved by using the card. But the government would not want to make it easy to park the money. (A flaw in the check-based stimulus efforts like in 2008.)

[Ruby the Liberal]

21. Should have refreshed the page before I posted.

Great minds. :toast:

[Ruby the Liberal]

20. Saving isn't a stimulant

Why the tax cuts for the rich are such a bad, bad idea. Seed the poor, and they spend. Seed the rich and they invest.

The more the poor spend, the more businesses can pay their employees, who then spend at businesses who can pay their employees and on and on it goes.

This is why tax cuts are at the bottom of the stimulative heap and food stamps are at the top (most stimulative) closely followed by unemployment. The latter 2 go right back into the economy.

[LynneSin]

48. Same reason Tax Cuts to the Rich don't work

The Rich already have all the planes, houses, boats and other big ticket items they can think of. And since the wealthy only represent about 2% of our population it puts very little of that money back into the economy.

Think if you were given a $3500 pre-paid card that couldn't be banked but able to use to spend on anything you want. Personally I would like to get some repairs done to my house - it would probably all go for that right there.

[geek tragedy]

18. It would get attacked as a give away to the bank issuing

the credit card, and to the card network (Visa, Mastercard, AMEX or Discover) that would be able to charge Interchange fees on it.

[JI7]

25. yup

[yellowcanine]

22. Nit pick. Technically that would be a debit card, not a credit card.

When the money is gone it is gone - there would be no credit issued.

[Kurt_and_Hunter]

23. Correct. Thank you -- got in under the edit wire

[Drale]

24. That would be great

I wasn't able to the a stimulus check last time because well I don't really remember why but still.

[The2ndWheel]

26. Just thinking about having to do that makes me depressed

I'm not allowed to do something with the money/digits on a screen? Just give the credit card to someone else then. I can't stand the idea of spending for the sake of spending. Maybe if the card didn't expire for a few years. But then that would defeat the purpose.

If the card was sent to me, and I had to use it up within six months, I'd cut the card up. I'm sure there would be a couple with a kid that could use my $3,500. Or some single person not making enough. Have a lottery to see who would get it. Could I give it to someone that I know would spend it? I couldn't even imagine spending an extra $3,500 on top of what I would already spend during the 6 months.

Now here's what I really think...

[Kurt_and_Hunter]

27. Most charities take credit card contributions

[The2ndWheel]

31. Then give it directly to whoever needs it the most

If I have to give that money away within 6 months, then just take me out of the loop. Some organization would get the money anyway, and I don't know which would need it the most, so, I'm sure someone higher up has the relevant information. It really wouldn't be an act of goodwill on my part, because the money wouldn't be coming from me. I wouldn't be losing money by sharing it with others. I wouldn't be giving anything up for the good of the group. Because in 6 months the card expires anyway.

[uncommon]

43. You would cut it up? Really? $3,500? Must be nice to be you.

I could buy clothes for my daughter for the next 5 years with that kind of disposable cash.

Hell, buy things and give them to people who need them. Better yet, give the card to someone who really needs it if you don't.

[grasswire]

28. DAMN!! Do you think poor people don't need $??

I'm sick of this kind of means testing on the backs of the poor folks -- many of whom are working but don't make enough to pay taxes.

A stimulus ought to go first and foremost to the people who need money the most!!

Why do you want to deny a single mom the ability to buy a pair of NEW shoes for her kindergartner?

Why do you want to deny elderly folks the ability to buy a new shower curtain or fix the fence?

This infuriates me, on behalf of all Americans who are always forgotten, always at the bottom of the heap.

I notice that the rich folk will get your debit cards without any hesitation!!

Grrrrrrrrrrr.

[Kurt_and_Hunter]

30. tax *filing*, not tax paying

If a lot of poor people don't file at all then I would revisit the question. My impression was that most heads of households file, even if no taxes are owed.

(I have filed a number of "too poor to pay taxes" returns in my time,

(The "tax filing" phrase was to pre-empt the inevitable rhubarb about whether people were in the country legally.)

[Stoic]

29. Yes, more consumption.

Not more and better jobs. Not better pay. Not benefits. Not secure retirements. Just more money to buy more shit from China. YAY!

[Dappleganger]

32. The repukes will demand every recipient get drug-tested, of course.

[TheKentuckian]

33. Yeah, Democrats reserve that for people that might want "Canadian style" health care.

[taught_me_patience]

34. Gonna cost $4T... how are we going to pay for that?

This would be the final gambit, because if it didn't work, we'd be back to square one and $4T more in debt. Expect a currency collapse after that.

[Kurt_and_Hunter]

36. Isn't it less than $700 billion?

I'll admit the zeroes get confusing sometimes, but I think 100 million x $3,500 = 350 Billion

I doubt we have much more than 200 million adult citizens.

(I picked $3,500 as a discussion point to kick around the concept of something comparable to the first stimulus, but that would hit like a bomb--99% spent and all in a hurry.)

[taught_me_patience]

37. Yes $350B, I was wrong.

I like this idea because I think we need a big stimulus shock to get this economy going and self-sustaining.

[Kurt_and_Hunter]

38. The orderly pace of the first stimulus lacks "game-changiness"

I agree with you. I want a *shock* to the system.

[AnArmyVeteran]

42. Great idea! Too bad leaders have no creativity.

[izzybeans]

44. When we gave money to the banks it should have been to erase

consumer and education debts off the books. We need a reboot and a restructuring of our consumption.

The banks were rewarded for their bad behavior, while debts have risen in ways individuals can not control (medical bills, school bills, childcare bills, etc.). We are supposed to pretend its the individual citizen's bad behavior that got us into this.

Remember if you have debt its your fault. I don't care why. :sarcasm:

[MadHound]

45. And in three months time, that money will have been spent, and the economy will be crashing again

Rather than opting for a short term fix, why don't we use that money to institute a massive WPA style works program, one that will rebuild and update our infrastructure while simultaneously putting millions of people to work. It would do more long term good and help boost our economy for years, not just a few months.

[Ganja Ninja]

46. It would be easier to sell if you call it a tax credit.

[Kurt_and_Hunter]

51. Probably correct

[FooshIt]

47. for the amount we're in the hole it should be more like 25K debit cards

maybe more