I have a very simple solution to America's gasoline problems. My proposed system will have an immediate impact to help with America's with high gasoline costs, minimize CO2 emissions, help America become energy independent, help boost our economy, and help build a bridge to a transportation system that isn't dependent on gasoline.
The theory is to create a revenue neutral tax on gasoline that will make it so alternatives to gasoline are more attractive while at the same time making conservation of gasoline more attractive.
Year One:
Take the total number of gallons of gasoline used in 2008 by Americans and multiply by $1. Divide this number by the number of taxpaying citizens in the US. This should be around $900 per person.
Send each taxpaying citizen a check for the amount above which should be around $900 each.
Add a $1 per gallon tax on gasoline. This is a revenue neutral tax where the tax collected on gasoline goes directly back to the people by way of the checks sent out above.
Year Two:
The same as year one except "2008" become "2009", "$1" becomes "$2", and "around $900" becomes "around $1,800".
Year Three:
The same as year one except "2008" become "2010", "$1" becomes "$3", and "around $900" becomes "around $2,700".
Year Four, Five, Six, etc.
Keep the same system used in year three. It may be desirable to continue with the upward trend.
How This Solution Works
If our country implements this solution there will be a lower demand for gasoline than if the system was not in place. Right away consumers will naturally conserve more so they can use their gas rebate check for more things than just helping them pay for the gas tax. Consumers will naturally want more efficient cars and automakers will naturally fill this demand. The free market will immediately begin investing in non gasoline powered transportation. The system would be simple to implement because it would only adjusting the current tax that exists on gasoline and also sending out more checks like the rebate checks sent out in 2007.
Tuesday, September 30, 2008
Thursday, September 4, 2008
Bailout Alternative: The Lender Stimulus and Debt Relief Package
You've probably heard all the hype about how we need to pass this bailout package (AKA rescue package) right away so American businesses have money to lend again before it is too late and our nation enters a severe recession and people lose their jobs, savings, financial security, etc.
Nobody seems to like the government proposal because it buys bad debt off of companies using taxpayer money. It other words, it is corporate welfare. However, people on TV are aggressively trying to sell this plan to us using the false logic that we have to do it because doing nothing is not an option.
There are other options to solve the credit crunch so that lenders have money to lend again. Below is just one option I came up with:
The Lender Stimulus and Debt Relief Package
This plan gets money back in the hands of the lenders who have a history of making good loans to the American people. Like the government plan, this plan uses government/taxpayer money, but it does so in a way that benefits taxpayers, providing a solution to the credit crunch while at the same time providing much needed debt relieve and economic stimulus. This plan holds businesses accountable for the loans they made and also holds people accountable for money they borrowed.
The details of the plan are as follows. The government will give each taxpayer a fixed amount of money with the condition that if the taxpayer has debts then they are forced to use the money to pay off their debts. Since our nation's credit crunch is a massive problem, the amount of money needs to be large to have an impact. Perhaps a good ball park number is for each taxpayer to get around $5,000 each which is roughly $700 billion number divided by the number of taxpayers. This money can be used to pay debts like a person's mortgage payment, student loan payments, auto loan payments, credit card payments, etc. The government would send each taxpayer a report listing their debts and the taxpayer could choose which debt or debts to pay down. If a person only owes $2,000 on their car and has no other debts then the government would pay off their car and send them a check for the remaining $3,000. If a taxpayer had no debts then they get the full $5,000. Taxpayers each benefit the same amount and they are all held accountable for their debts in a relative manner.
Since the majority of Americans have debts, the majority of the $700 billion would transfer directly into the hands of lenders who have a history of making good loans that get paid back. This would amount to a huge influx of capital that these good lenders would have at their disposal to lend again thus rescuing America from our credit crunch. Good lenders would have lots of money to lend again. Also, this would have a secondary benefit of providing an economic stimulus because people with less than $5,000 in debt would have money to spend and invest. Also, even people who did have their debts paid down or paid off would be in a better position to spend because it is easier to spend money after you remove other debts like a car payment.
Of course this isn't a solution to fix all that is wrong with our economy. It is essentially taxpayers borrowing from their future to pay off current debts in a way that resolves the credit and lending crunch. However, even though this solution is just a Band-Aid for the current crisis, it is a much better Band-Aid for the taxpayers than the plan the government has proposed.
Please let me know what you think about The Lender Stimulus and Debt Relief Package.
Nobody seems to like the government proposal because it buys bad debt off of companies using taxpayer money. It other words, it is corporate welfare. However, people on TV are aggressively trying to sell this plan to us using the false logic that we have to do it because doing nothing is not an option.
There are other options to solve the credit crunch so that lenders have money to lend again. Below is just one option I came up with:
The Lender Stimulus and Debt Relief Package
This plan gets money back in the hands of the lenders who have a history of making good loans to the American people. Like the government plan, this plan uses government/taxpayer money, but it does so in a way that benefits taxpayers, providing a solution to the credit crunch while at the same time providing much needed debt relieve and economic stimulus. This plan holds businesses accountable for the loans they made and also holds people accountable for money they borrowed.
The details of the plan are as follows. The government will give each taxpayer a fixed amount of money with the condition that if the taxpayer has debts then they are forced to use the money to pay off their debts. Since our nation's credit crunch is a massive problem, the amount of money needs to be large to have an impact. Perhaps a good ball park number is for each taxpayer to get around $5,000 each which is roughly $700 billion number divided by the number of taxpayers. This money can be used to pay debts like a person's mortgage payment, student loan payments, auto loan payments, credit card payments, etc. The government would send each taxpayer a report listing their debts and the taxpayer could choose which debt or debts to pay down. If a person only owes $2,000 on their car and has no other debts then the government would pay off their car and send them a check for the remaining $3,000. If a taxpayer had no debts then they get the full $5,000. Taxpayers each benefit the same amount and they are all held accountable for their debts in a relative manner.
Since the majority of Americans have debts, the majority of the $700 billion would transfer directly into the hands of lenders who have a history of making good loans that get paid back. This would amount to a huge influx of capital that these good lenders would have at their disposal to lend again thus rescuing America from our credit crunch. Good lenders would have lots of money to lend again. Also, this would have a secondary benefit of providing an economic stimulus because people with less than $5,000 in debt would have money to spend and invest. Also, even people who did have their debts paid down or paid off would be in a better position to spend because it is easier to spend money after you remove other debts like a car payment.
Of course this isn't a solution to fix all that is wrong with our economy. It is essentially taxpayers borrowing from their future to pay off current debts in a way that resolves the credit and lending crunch. However, even though this solution is just a Band-Aid for the current crisis, it is a much better Band-Aid for the taxpayers than the plan the government has proposed.
Please let me know what you think about The Lender Stimulus and Debt Relief Package.
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