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A "New" New Bailout Plan

A "New" New Bailout Plan

With the final approval of the bailout, there seems to be a split on how people feel about it. Some think it's unfortunate, but necessary while others believe it's a complete waste of taxpayer dollars.

One American has written his own version of the bailout plan and how it's more beneficial to us, and it's been making the rounds on the internet. We got it in an email and thought it at least discussion worthy (if you can keep up with the math, anyway.)

"I'm against the $85,000,000,000.00 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bona fide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.
So divide 200 million adults 18+ into $85 billion that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family?

- Pay off your mortgage - housing crisis solved.

- Repay college loans - what a great boost to new grads

- Put away money for college - it'll be there

- Save in a bank - create money to loan to entrepreneurs

- Buy a new car - create jobs

- Invest in the market - capital drives growth

- Pay for your parent's medical insurance - health care improves

Remember this is for every adult US Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1,000.00 ( 'vote buy' ) economic incentive that is being proposed by one of our candidates for President. If we're going to do an $85 billion bailout, let's bail out every adult US Citizen 18+!"

Some pretty interesting thoughts, and not totally invalid. Assuming the government required that each homeowner paid off their mortgage from these funds—or at least those in default—the remaining funds would be spent in one of three ways: People would blow it, which would help the economy by putting the money back into the cycle; People would save it, which would give banks more money to lend out, particularly to small businesses, which would create more jobs; or people would pay off their credit card debts and that helps the credit crisis. None of these options would be a bad thing.

What do you think? Obviously this wouldn't happen, but let's play 'what if.' What if this came true? Would it help the economy better than the current plan? Is there anything you'd take out or add to this plan?

Posted: 10/15/08

I like the idea that the money should be redistributed back to the American people. Help people get out of debt and it will help the economy. I think giving it to the very companies that have allowed themselves to go bankrupt is foolish. But, in terms of this specific scenario, the numbers don't add up. $85 billion divided by 2 million people is $425...not $425,000.

Let's not put the guy who wrote the email in charge of handing out the checks, shall we?


I like this idea a lot, but my question is, where is this $85 billion coming from? If it's on the same credit card we used to finance the war and the other bailout bill, then we're just charging this to China and other creditors, so even though we're "bailing out" our economy here, we're still tens of trillions of dollars in debt because no new capital is coming IN to the country and we're spending faster than we're taking in. I feel like this idea sounds good in theory, but it's essentially begging people to give us a burger today and pay back tomorrow but we definitely know we don't have the cash to pay it back.