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catoismymotor (38.90)

My best idea to help the economy.

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July 14, 2009 – Comments (20)

I don’t like the idea of a stimulus package to help us out of this economic mess. I like the idea of TWO stimulus packages even less. With that being said I have put some thought into ways I would throw money at the problem if there were no other alternatives.

 

The best conceived idea I have is offering a loan, a federal assistance loan, to individual mortgage holders and renters that find themselves unemployed or under employed. I put this idea past my crack team of financial analysts (my dogs) and we think the idea is not too vacuumous*. Yes, I said vacuumous. It is my word. I like it. Let’s move forward. The idea can be broken down accordingly: A proper criteria would be established in order to qualify for said loan. Those details I will leave for someone else to hammer out.  A maximum of $18,000 or a minimum of $3,600 ($1500 or $300 monthly for twelve months) would be mailed directly to the mortgage lender and applied to your account. Once the twelfth and final check has been issued by the federal government a three month grace period will be given for the renter or homeowner to begin paying back the loan. The term and rate of the loan will be determined before hand as with any other conventional loan. The rate, 4% to 6%, will be locked in and the term of the loan will be as well, 60 to 120 months. An alternative structure for payment can be arranged. One idea I have is the payment can be made annually vs. your expected tax refund. Any additional amount due for that year would be expected to be paid at the same time you file your taxes. Another idea I have is one stolen from the federal student loan program; take an education or medical job in a bad part of town and have a portion of the loan forgiven each year until it all goes away (five or six years). With this idea I wish to lend a hand to those that need some help for a period of time. With loans, not subsidies, hopefully we, those that actually fund the government, will see most of this money back instead of seeing it disappear down the drain.

 

I like ideas that benefit you, the individual or small businesses owner. I think small business loans would be another great way to give the economy a boost, not to mention cutting taxes. I want to know the ideas do you have. What are your thoughts? How would you stimulate this economy?

 

* = To suck.

20 Comments – Post Your Own

#1) On July 14, 2009 at 11:10 AM, SkepticalOx (99.45) wrote:

I don't think it's that hard. Cut taxes and cut government spending on anything that's not education, defense, and maybe healthcare.

Easier said than done of course :P, but tax-cuts have the biggest multiplier effect.

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#2) On July 14, 2009 at 11:42 AM, SkepticalOx (99.45) wrote:

First off... I want to retract the last sentence in my post regarding the multiplier. This is one of those debateable things in economics on whether what has the biggest mutliplier, government spending or tax cuts. Regardless, I think tax-cuts are far simpler.

Secondly, for the long-term, the most important thing is probably education reform. I'm not going to get into a debate on what the government should focus on, private or public schools (but I would send my kids to private school if things stay the way they are), but a look at today's public school's and you seriously got to wonder about the future. A lot of the blame has to go onto parents also, not emphasizing education enough for their kids. If you want to continue to be the best country in the world, you'll also need the best education system in the world.

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#3) On July 14, 2009 at 11:45 AM, davejh23 (< 20) wrote:

"The rate, 4% to 6%, will be locked in and the term of the loan will be as well, 60 to 120 months."

How are they going to pay off the loan balance in 120 months?  In most cases, 1/3 of the loan value wouldn't even be paid after 120 months.  How about no balance reductions, and we increase loan term to 600 months?  If you die before the loan is paid in full, the goverment takes full ownership. 

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#4) On July 14, 2009 at 11:49 AM, tonylogan1 (28.22) wrote:

I dont like "helping" people or small businesses by giving them loans. It really has the effect of helping the banks control them by keeping them in debt. And it props up the price of housin, making it less affordable foe everyone that does not want to take out loans to live.

If people have not saved money for rent, etc. then they should move to a less expensive place or eat less.

If you must spend money, I'd do it on things that will make the country more productive, like more spending on research or building additional power generation capacity (nuclear).

Since we're in my dream world here.. we could also use it for congressional severence packages 

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#5) On July 14, 2009 at 11:51 AM, tonylogan1 (28.22) wrote:

no ghetto emphasis intended... *housing ... *for

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#6) On July 14, 2009 at 11:55 AM, ReadEmAnWeep (81.12) wrote:

"

Secondly, for the long-term, the most important thing is probably education reform. I'm not going to get into a debate on what the government should focus on, private or public schools (but I would send my kids to private school if things stay the way they are), but a look at today's public school's and you seriously got to wonder about the future. A lot of the blame has to go onto parents also, not emphasizing education enough for their kids. If you want to continue to be the best country in the world, you'll also need the best education system in the world."

 

Yes! I am not even joking when I was thinking this last night. I was actually thinking that last line exactly. No joke. I just couldn't figure out how I can convince the rest of america about that...

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#7) On July 14, 2009 at 12:00 PM, ralphmachio (23.67) wrote:

Wow!- you're both elected.  You can figure out who is VP.  Anything would be better than the intentional scuttling of our economy and government.  

 This planet is funny.  Nothing is what it seems.  You really think O'bama is creating policy for this country?  That seems silly to me.  

We are playing chess with an invisible opponent who is several moves ahead of us, and we think we are playing checkers.  

I'm not anticipating a victory by the good guys anytime soon, the bad guys are artful at changing the rules.  

I simply can't believe people see the government as a solution to anything, being the most obvious factor in need of governance.

It's like perpetually breaking your axles, and saying,"I think we just need a beefier turbo" 

 

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#8) On July 14, 2009 at 12:19 PM, catoismymotor (38.90) wrote:

How are they going to pay off the loan balance in 120 months?

Easy. $18,000 @ 6% for 120 months = $199.84 per month.

 

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#9) On July 14, 2009 at 12:22 PM, JTShideler (81.54) wrote:

I simply can't believe people see the government as a solution to anything, being the most obvious factor in need of governance.

Ralph, you can't see it because you pay taxes and understand that you are not getting your money's worth, however, 40-50% of Americans pay no income taxes.

If you had to pay $100 for the government to give someone a $5 stimulus check, you would say that is ridiculous.

But if you pay $0 to get a $5 stimulus check then who wouldn't want more government run give aways, you don't pay for it?

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson

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#10) On July 14, 2009 at 12:30 PM, catoismymotor (38.90) wrote:

I dont like "helping" people or small businesses by giving them loans.

Giving loans away is what got us here. There would be a qualification process to go through, as with any good lender, before any checks are cut. Don't get me wrong, I don't like the idea of debt. When debt is mishandeled it can cripple you. The idea of applying for the loan would be a choice made by the borrower, not something forced upon them. I propose a choice as opposed to force. Force is what is currently being used by the present administration against financial institutions, bankrupt automobile manufacturers, banks and smaller governments. 

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#11) On July 14, 2009 at 12:43 PM, catoismymotor (38.90) wrote:

Hey, I never said my idea was the way to go. I just said I thought is was a better way to go about sending money into the system than is being executed at the moment. To me a small loan to someone who could use some wiggle room while the economy picks up is better spent than having the government pay for empty seats on some Alaska based airline.

I love the idea of cutting taxes. I love the Fair Tax even more. I think shoveling dough into a canyon of debt is not the way for the government to handle this mess. I think Obama Wan Kenobi and his posse are daft and make the Carter administration look like a convention of Mensa members. I also think it is time for lunch. Bye!

 

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#12) On July 14, 2009 at 12:47 PM, tonylogan1 (28.22) wrote:

cato - maybe you miss the nuance in my post.

If there is a government stimulus in the form of loans to renters/small business or whatever, the people that do not take the loans are still FORCED to subsidize the loans. (i.e. where does the government get the money to loan?)

Those responsible people who do not want to take the loans do not HAVE to, but they WILL be FORCED to pay higher rent, and higher costs on everything because the government is WASTING money and driving UP the cost of assets.

It is the reason why I pay so much in rent right now. Mortgages were given away too cheaply, and yes I had a choice to not take one, but it still drove up the price of rent, even while home prices (and finally rents too) are falling fast now.

BTW, more spending on education is not an answer. Historically it is proven that the more a central government spends on education, the more fascist it becomes ... I'd be a much bigger fan of education reform than increased education spending (particualrly at the federal level)

Federal government has spent enough!

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#13) On July 14, 2009 at 2:08 PM, catoismymotor (38.90) wrote:

Tony,

Perhaps you failed to catch the nuance my entry in #11:

Hey, I never said my idea was the way to go.

And in my original post:

...I have put some thought into ways I would throw money at the problem if there were no other alternatives.

All I proposed was my idea in place of the POS that is currently in place. That is all. I don't like the government spending a dime more than is needed, just like you. But I figured in a world where Peter is robbed to pay Paul, Paul might as well have a shot at getting his money back with a little interest.

BTW: I never said anything about throwing money at education

Cato

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#14) On July 14, 2009 at 2:22 PM, tonylogan1 (28.22) wrote:

Cato - Look at the timing of your posts... obviously I did not read that second one before I replied...

And the eductation thing wasnt for you, it was to previous posters.

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#15) On July 14, 2009 at 2:46 PM, tonylogan1 (28.22) wrote:

oh goodness... please don’t let me spell education wrong!

p.s. can CAPS get a spell check so I don't look more ridiculous than necessary?

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#16) On July 14, 2009 at 2:49 PM, catoismymotor (38.90) wrote:

I meant Peter might as well have a shot of getting his money back with interest. I wish this phone would stop ringing for five minutes, it is a real distraction today.

Tony,

I apologize for my tone. It has already been a long day. No hard feelings, okay?

Cato

 

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#17) On July 14, 2009 at 2:51 PM, catoismymotor (38.90) wrote:

Eyev n'ver bean much ov one fer buk lernin.

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#18) On July 14, 2009 at 3:06 PM, BMFPitt (79.30) wrote:

All I proposed was my idea in place of the POS that is currently in place.

I fail to see how it is any less of an atrocity.  At least with the cirrent POS we get some bridges fixed, and the other 98% is on worthless crap.  Yours seems to amount to nothing more than fueling more of the behavior that caused this mess in the first place.  I'd rather get 2% useful stuff than 0%.

But I figured in a world where Peter is robbed to pay Paul, Paul might as well have a shot at getting his money back with a little interest.

What leads you to believe we'd get more money back with your loans-for-losers plan than with the wasteful spending plan? At least with the wasteful spending plan we'll be getting income taxes paid by some amount of the pork recipients.  That probably amounts to more money in real dollars than would get paid back under your system.

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#19) On July 14, 2009 at 3:55 PM, tonylogan1 (28.22) wrote:

no worries Cato... same here if I was gruff...

you're to be commended for at least thinking of ideas to fix things, rather than just complaining like most people do...

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#20) On July 14, 2009 at 3:59 PM, catoismymotor (38.90) wrote:

BMFPitt,

What is it? Why so advisarial? I proposed a idea. Just an idea. Only an idea. What about an idea is so threatening to you? Do you fear that I have some power to make my idea come to fruition? Do you think I hold some sway with some member of Congress that might actually make this work? What is it?  Do you imagine that I am the member of some secret fraternal organization that pulls the strings of world governments and I can make this work any time I wish? Do ya'? Hmmm? Sorry, pal. No such luck. I am just a guy that came up with a idea I would have more faith in than the current one.

Yours seems to amount to nothing more than fueling more of the behavior that caused this mess in the first place.

-AND-

What leads you to believe we'd get more money back with your loans-for-losers plan than with the wasteful spending plan?

Wrong. I am talking about a low interest loan paid over a generous amount of time and a good rate that would help those who were caught off guard finacially weather this storm until the tide starts to turn. That is all. I am not talking about a something for nothing program like wellfare or public housing. And I believe we would get most of our money back for two simple reasons: 1) The loans would be made to those with good credit histories before the ground came out from under them. 2) Since these are extra ordinary times the government could always write into the agreement that payment would be garnished from their wages if certain terms are not honored. We voted the government to have teeth. And they would surely use them on individuals. The way the money is being parcelled out to companies too big to fail there is little accountablility with the way the current laws are written. With the current plan I see nothing but union bosses and investment bankers getting their pockets lined with our money. I have more faith in Joe Mainstreet than anyone at BAC, AIG, Chrysler or Gov't Motors.

 

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