Another Bailout?

Why are there so many damn bailouts? Sigh...ode to getting votes!

So, if we are going to do another damn bailout and we are going to loan money to banks at 1%, why don't we do the same thing to consumers? Why not instead give a $700,000,000,000 package to each individual? Each individual in the country would get about $2,295.08. You could even give this amount of money out in the opposite direction of the tax base? This way, the poor people - who will spend it quickest most likely - will pump all of this money back into the economy from the low levels - buildings the coffers of the system many times on its way up. Imagine a poor family who makes $25,0o0 a year getting a check for $5,000? How do you think that would be spent?

And that $4,000,000,000,000 (thats trillion by the way - 12 zeros - who are we? Zimbabwe?) that we are loaning out from all the other departments of the Treasury - well, we could offer loans to people all the United States at super low interest rates! That would be a $13,114 loan per person in this country. Add that to the average check of $2,295 in cash, and suddenly there is a $15,409 windfall for each citizen in the United States of America. I wonder, how that money, will be spent? Think about the amount of that money, that you - the Federal Governement will make off of it? I learned in my Economics course that the mutiplying effect of money in the US Ecnomogy was about 3. That means, the $4.7 trillion in money that would be loaned out to the people of the United States would be actually turn into $14.21 trillion in money from the governments point of view. And how much of that money would you, Uncle Sam, take from a tax perspective? 10% (I keep this number lower because individual income tax wont be included). That's almost $1,500,000,000. That also happens to be about 31% of the original loan amount - imagine we applied the taxes collected from the loan money and applied it to the original loan, minus the costs of operation (probably 50% of the taxes collected)?

This is a huge amount of money. This volume of zeros, in the past, has always been associated with hyper-inflation. This amount of money injected into the economy would turn out to be nearly the size of the annual economy. In essence, we could double the rate of growth of the United States, over the course of a year.

Of course, the very fact that we are bailing anybody out is a screw-up, in my opinion. Those who have savings, those who have sacrificed are now bearing the risk because of inflation. Gold is still around $700 for an ounce. All time highs and it is holding...

I just think bailing out the coporation is part of the problem. We are worried about a consumer led recession. House pricing drops. Lack of demand. Something like this might change that dynamic...course...we could all be screwed either way. :-)