Predictive markets currently give Barack Obama (the Democratic ticket) around a 68% to be reelected in 2012, but I think this number should be more like a meager 20% chance of Obama being reelected. My reasoning has to do with his 2008 campaign message, the situation he is inheriting, and the nature of the American people. I want to be clear that my prediction isn't that Obama will do a bad job, but rather that the dynamics are already in place so that he will not get reelected in 2012 regardless of what he does.
One major aspect of Barack Obama's campaign message was purposefully unspecific slogans like hope, change, yes-we-can, and believe. Vague slogans like these allow people to believe their vision of the future is the same as Obama's even though in reality things are likely very different. After four years of Obama being in office, these vague slogans will be replaced with specific thoughts like "I believe Obama did something but it wasn't the change I was hoping for".
Another major aspect of Obama's campaign was that things are bad in America, it is Bush's fault, and McCain would be four more years of the same. In 2012 Obama will not be able to focus on how bad things are, Obama will not be able to blame Bush any more, and Obama will be the "more of the same" candidate. He will no longer have the luxury of being evaluated on the vision he creates, but instead he will be evaluated on what he was able to achieve.
A good campaign can deal with the issues mentioned above, however, because of the magnitude of what the Obama presidency is inheriting there is no way Obama will come out after four years looking good. You have the global recession, dependence on foreign oil, the housing crisis, the credit crisis, the ongoing challenge of keeping America safe, and the list goes on and on. The global recession, housing crisis, and credit crisis are already set in motion to get worse before they get better. Reducing our dependence on foreign oil is going to involve a tremendous short term expense before we can reap the long term rewards. Progress can't really be measured in four years.
Any logical thinker would realize that Obama isn't responsible for all the issues facing America, but after four years in office the demanding nature of the American people will be such that they expect our leader to successfully address these issues our country faces. If Obama does nothing and things haven't miraculously gotten better then Obama's inaction will be blamed. If Obama does something and things haven't gotten better then Obama's actions will be blamed. I simply can't envision a scenario where Obama wins in 2012. It makes you wonder why he is currently a 2:1 favorite.
Saturday, November 29, 2008
Saturday, November 8, 2008
In Politics, How Much Psychological Manipulation is Acceptable?
We all know and accept that a certain amount of psychological manipulation occurs in politics. For example, a McCain advertisement might have ended with McCain's face appearing right next to an American flag to suggest that McCain is patriotic and good for our country. As another example, an Obama advertisement might have shown images of McCain and Bush repeatedly together to suggest that McCain is four more years of Bush. This type of thing happens all the time in politics and it is generally considered acceptable.
However, when does this sort of manipulation go over the line? What if you played a McCain commercial backwards and it said over and over that "You will vote for McCain because it will make you feel good". Most people, including myself, would consider that unacceptable psychological manipulation. What if there was some white noise in a McCain commercial and it could be shown that, embedded in the white noise, was a clear message that said "You must vote for McCain because our country needs McCain". Again this would generally be considered to be unacceptable psychological manipulation.
Let's examine something else. What if McCain were to give a speech to the American people and at the start of his speech he mentioned that his campaign hired some neuro-linguistic programming and hypnosis experts to write and help coach McCain in his speech delivery. What if McCain told the American public that he would like to try the techniques out on them?
McCain could say "Reagan" and then point to himself. McCain could say "security" and put his hand over his heart. McCain could say "Obama" and scratch his armpit while making the "loser" symbol with his hand. Next McCain could bring out a watch on a chain and ask the audience to look into the watch as it rocked back and fourth as he tried to hypnotize them. He might ask them to relax and listen to his voice while instructing them to breathe in and out. He might ask them to count backwards or something. He might gain their trust by asking them to focus on undeniable facts like "you are here right now" and "you can hear my voice". Then after people are hypnotized he might implant a few hypnotic commands in a firm and confident voice saying something like "because you care about America, you must vote for John McCain as President of the United States".
Would this sort of neuro-linguistic programming and hypnosis be acceptable? McCain would be attempting to get votes based on his ability to successfully use psychological techniques that manipulate people's thoughts. I might actually be OK with this made up scenario because, in the made up scenario, at least McCain was honest with the audience about his plans to use these psychological techniques on them.
However, what if McCain didn't tell the audience his carefully planned and orchestrated scheme to use neuro-linguistic programming and hypnosis to manipulate their thoughts? How creepy would that be? What kind of a leader would try and brainwash people to get elected? What kind of opinion could a politician like that have of the American people? What if a politician did this sort of thing repeatedly in the various speeches throughout the campaign knowing full well the impact it could have on people, especially young people? What if these techniques worked and helped the politician get elected? Calling it is creepy is an understatement!
The Association of American Physicians and Surgeons (AAPS) has an interesting article about this very subject titled "Oratory - or hypnotic induction?" That article identifies numerous textbook examples of Obama's speeches that contain covert neuro-linguistic programming and hypnosis. Was this intentional? Was this a coincidence? At the end of the "Oratory - or hypnotic induction" article, there is a link to a 67 page pdf file that goes into detail about the psychological manipulation that occurred in Obama's speeches. The 67 page document references exact locations in speeches so you can watch and listen to Obama and form your own opinions on the numerous examples cited. It is a sobering experience to read that document.
Also, although this isn't really a laughing matter, I made a funny self-help guide for people who have been Obamatized: Top 10 Signs Barack Obama Hypnotized You.
However, when does this sort of manipulation go over the line? What if you played a McCain commercial backwards and it said over and over that "You will vote for McCain because it will make you feel good". Most people, including myself, would consider that unacceptable psychological manipulation. What if there was some white noise in a McCain commercial and it could be shown that, embedded in the white noise, was a clear message that said "You must vote for McCain because our country needs McCain". Again this would generally be considered to be unacceptable psychological manipulation.
Let's examine something else. What if McCain were to give a speech to the American people and at the start of his speech he mentioned that his campaign hired some neuro-linguistic programming and hypnosis experts to write and help coach McCain in his speech delivery. What if McCain told the American public that he would like to try the techniques out on them?
McCain could say "Reagan" and then point to himself. McCain could say "security" and put his hand over his heart. McCain could say "Obama" and scratch his armpit while making the "loser" symbol with his hand. Next McCain could bring out a watch on a chain and ask the audience to look into the watch as it rocked back and fourth as he tried to hypnotize them. He might ask them to relax and listen to his voice while instructing them to breathe in and out. He might ask them to count backwards or something. He might gain their trust by asking them to focus on undeniable facts like "you are here right now" and "you can hear my voice". Then after people are hypnotized he might implant a few hypnotic commands in a firm and confident voice saying something like "because you care about America, you must vote for John McCain as President of the United States".
Would this sort of neuro-linguistic programming and hypnosis be acceptable? McCain would be attempting to get votes based on his ability to successfully use psychological techniques that manipulate people's thoughts. I might actually be OK with this made up scenario because, in the made up scenario, at least McCain was honest with the audience about his plans to use these psychological techniques on them.
However, what if McCain didn't tell the audience his carefully planned and orchestrated scheme to use neuro-linguistic programming and hypnosis to manipulate their thoughts? How creepy would that be? What kind of a leader would try and brainwash people to get elected? What kind of opinion could a politician like that have of the American people? What if a politician did this sort of thing repeatedly in the various speeches throughout the campaign knowing full well the impact it could have on people, especially young people? What if these techniques worked and helped the politician get elected? Calling it is creepy is an understatement!
The Association of American Physicians and Surgeons (AAPS) has an interesting article about this very subject titled "Oratory - or hypnotic induction?" That article identifies numerous textbook examples of Obama's speeches that contain covert neuro-linguistic programming and hypnosis. Was this intentional? Was this a coincidence? At the end of the "Oratory - or hypnotic induction" article, there is a link to a 67 page pdf file that goes into detail about the psychological manipulation that occurred in Obama's speeches. The 67 page document references exact locations in speeches so you can watch and listen to Obama and form your own opinions on the numerous examples cited. It is a sobering experience to read that document.
Also, although this isn't really a laughing matter, I made a funny self-help guide for people who have been Obamatized: Top 10 Signs Barack Obama Hypnotized You.
Friday, October 17, 2008
Where will the Dow be on November 4, 2008?
I believe the stock market will play a major role in determining the next president of the United States. In particular, people tend to use the Dow Jones Industrial Average as a measure of how well our economy is doing. I decided to look into the closing value of the Dow on some key dates.
On January 14, 2000 the Dow closed at 11,722.98 which can serve to mark a high point of the Dow during the dot com bubble.
Around a year later, on January 19, 2001, the day before George W. Bush was inaugurated President, the Dow closed at 10,587.59.
On September 10, 2001 the Dow closed at 9,605.51.
A little more than a year after the attacks on September 11th, on October 9, 2002 the Dow closed at 7,286.27.
Five years later, on October 9, 2007 the Dow closed at 14,164.53. The Dow was thousands of points higher than the dot com bubble high.
Fast forward about a year, to less than a month before the election and on October 10, 2008, the Dow closed at 8,451.19.
Where will the Dow close on November 4, 2008? If the Dow closes below 10,000 then I predict Obama wins. If the Dow closes above 11,000 then I predict McCain wins.
Update: On November 4, 2008 the Dow closed at 9,625.28 and Obama won.
On January 14, 2000 the Dow closed at 11,722.98 which can serve to mark a high point of the Dow during the dot com bubble.
Around a year later, on January 19, 2001, the day before George W. Bush was inaugurated President, the Dow closed at 10,587.59.
On September 10, 2001 the Dow closed at 9,605.51.
A little more than a year after the attacks on September 11th, on October 9, 2002 the Dow closed at 7,286.27.
Five years later, on October 9, 2007 the Dow closed at 14,164.53. The Dow was thousands of points higher than the dot com bubble high.
Fast forward about a year, to less than a month before the election and on October 10, 2008, the Dow closed at 8,451.19.
Where will the Dow close on November 4, 2008? If the Dow closes below 10,000 then I predict Obama wins. If the Dow closes above 11,000 then I predict McCain wins.
Update: On November 4, 2008 the Dow closed at 9,625.28 and Obama won.
Sunday, October 5, 2008
Does the show "Face The Nation" have a political bias?
I recently heard somebody mention that the interview show "Face The Nation" was "without a political bias". As you can imagine I was excited to see if a politically unbiased show was possible.
When I arrived at the "Face The Nation" website I saw a picture of Obama all over the front page so I started to be a bit skeptical, but this was understandable since there was a recent Obama interview conducted on September 28, 2008. I watched the interview and was amazed at how pleasant and friendly the conversation was. Obama was asked some questions and given plenty of time to talk. Perhaps Schieffer likes to pitch softballs and likes to give his guests plenty of time to get their talking points out. No political bias so far.
I was intrigued enough to hunt around for the most recent McCain interview, and I found one conducted September 7, 2008. Similar to Obama's interview, the McCain Interview was very pleasant and cordial. However, I could sense something fishy going on so I decided to get to the bottom of it.
The transcripts of the two Interviews are very telling (Obama Interview .pdf Transcript - McCain Interview .pdf Transcript). They provide an excellent side by side comparison of the two interviews. Some people may find it difficult to pick out the political bias but once you see how the spot biased questions they hit you like a Mac truck. It is no accident either as the people writing these interviews are some of the best in the business. In the two interviews analyzed, I found the questions asked of Obama set Obama up with a perfect opportunity to frame the issues and to attack or reduce his opponents. It was pure softballs. On the other hand, with McCain the interview questions put McCain in a compromising political situation.
First I highlight the crux of the questions Schieffer asked Obama. As you will see, the questions either let Obama frame the issues for the benefit or Obama's campaign or they give Obama an opportunity to attack his opponents.
As you just saw, the questions asked gave Obama flexibility to frame the issues and allowed Obama to attack his opponents. If "Face The Nation" is unbiased, then we should expect the same kind of the treatment in an interview with McCain that took place a few weeks earlier. Let's see…
Wow, what a difference between the two interviews. Granted, there is not one smoking gun question that screams out biased interview, but the side by side comparison of the two "Face The Nation" interviews shows them to be incredibly biased. Obama was given a chance to frame the issues as Obama wanted, and gave Obama lots of oppertunities to attack his opponents. It was very different for McCain. McCain was put in a position to attack his own party. McCain was put in a position to talk about how the opposing party should be in his cabinet and administration. McCain was put in a position to defend Palin from attacks by his own party. McCain was put in a position to defend something that was prefaced as "going to cost the taxpayers billions of dollars". McCain was put in a position to have to defend his oponent's role as a community organizer. McCain was put in a position to talk about how more black people should be part of politics. McCain was asked to discuss a controversial aspect of America's volunteer army. Lastly, McCain was asked to talk about spending a non-partisan day with his fellow American, Barack Obama on September 11th, just to make sure McCain wouldn't take the closing moments of the Interview to go after any of Obama's policies or statements.
I conclude that "Face The Nation" does indeed have huge political bias, at least with regard to this election and the two candidates running for president.
When I arrived at the "Face The Nation" website I saw a picture of Obama all over the front page so I started to be a bit skeptical, but this was understandable since there was a recent Obama interview conducted on September 28, 2008. I watched the interview and was amazed at how pleasant and friendly the conversation was. Obama was asked some questions and given plenty of time to talk. Perhaps Schieffer likes to pitch softballs and likes to give his guests plenty of time to get their talking points out. No political bias so far.
I was intrigued enough to hunt around for the most recent McCain interview, and I found one conducted September 7, 2008. Similar to Obama's interview, the McCain Interview was very pleasant and cordial. However, I could sense something fishy going on so I decided to get to the bottom of it.
The transcripts of the two Interviews are very telling (Obama Interview .pdf Transcript - McCain Interview .pdf Transcript). They provide an excellent side by side comparison of the two interviews. Some people may find it difficult to pick out the political bias but once you see how the spot biased questions they hit you like a Mac truck. It is no accident either as the people writing these interviews are some of the best in the business. In the two interviews analyzed, I found the questions asked of Obama set Obama up with a perfect opportunity to frame the issues and to attack or reduce his opponents. It was pure softballs. On the other hand, with McCain the interview questions put McCain in a compromising political situation.
First I highlight the crux of the questions Schieffer asked Obama. As you will see, the questions either let Obama frame the issues for the benefit or Obama's campaign or they give Obama an opportunity to attack his opponents.
SCHEIFFER TO OBAMA:
…
(referring to the bailout) Senator, it's still very complicated. We should stress this, it still hasn't even been put down on paper, all of it. But I know you were talking with the negotiators through the night last night. What can you tell us about it, and can you support it?
…
How crucial is it that this pass? How bad is this situation right now?
…
should Senator McCain be getting the credit here for forcing these people back to the negotiating table?
…
This is your first time to talk about the debate since then. How do you think it went?
…
Some Democrats said that they thought he (McCain) was being condescending to you. Did you take it in that way?
…
Would you, and under what conditions would you talk to, say, somebody like President Ahmadinejad of Iran?
…
While we're still on foreign policy, Senator McCain's running mate, Sarah Palin, claimed in an interview that Alaska's proximity to Russia somehow enhances her foreign policy experience and credentials. Do you agree with that?
…
Well, do you believe she's qualified?
…
But don't you think what she says is important?
…
I mean, she could be a heartbeat away from the presidency.
…
McCain said one thing he would do would freeze spending… Freeze all government programs with the exception of entitlements, national defense and veterans' care. Do you think that's feasible?
As you just saw, the questions asked gave Obama flexibility to frame the issues and allowed Obama to attack his opponents. If "Face The Nation" is unbiased, then we should expect the same kind of the treatment in an interview with McCain that took place a few weeks earlier. Let's see…
SCHEIFFER TO MCCAIN:
…
(Schieffer brought up issues mentioned at the Republican convention)You're saying it was your party that was part of the problem and that you can be the agent of change. How do you convince people of that?
…
Are you going to try to form some sort of unity government? Are you going to try to have Democrats within your administration as well as Republicans?
…
So you're going to have Democrats in the White House?
…
Will you have Democrats in your Cabinet?
…
(Schieffer brought up Palin) But there's also a number of people, some of your supporters who are a little bit worried about it … Charles Krauthammer, the very conservative columnist....said the other day that the only constitutional job of the vice president is to be ready to become president at a moment's notice, and he said flatly, "She is not ready." How do you answer him?
…
He says, "Barack Obama is the least qualified presidential candidate in living memory." But he says when you picked Palin...the case against Obama, that case evaporates.
…
When will you let her out to campaign on her own? When will she start having news conferences? When will she start doing interviews?
…
(schiefer brought up Fannie Mae and Freddie Mac) There's no way you can say this is not going to cost the taxpayers billions of dollars. Do you think this is a good idea, Senator McCain?
…
You're talking about--they're going to have some more regulation. Is that what you're saying? More control?
…
Senator McCain, I want to ask you about the use of the term "community organizer." We heard Rudy Giuliani talk about Barack Obama being a community organizer, and he sort of did it in a sort of denigrating way. And the audience sort of giggled when he said that. And then we heard Governor Palin talk about being a mayor, and she said, "That's being a community organizer with responsibilities." You know, I know a lot of people who think being a community organizer's a pretty good thing to do. I know in your speech, at the end, one of the parts that I liked most was when you called on Americans, "If you want to make things better, enlist in the military, teach, help somebody that's hungry." Why would they use that term in that way?
…
So you do not think that it's a negative that Barack Obama was a community organizer?
…
Is that why you said that you're the one who can change, and that he's just sort of not up to it?
…
I want to ask you about the composition of the--of the convention. There were 36 African-American delegates out of 2300-plus delegates there. How can you survive as a party if you become just the party of white people?
…
So what are you going to do about that?
…
Let me ask you about this. You and I both know that the all-volunteer army is about the best army in the world. I don't think there's any question about that. But we have one half of one percent of the American people who are making all of the sacrifice in this war. If the rest of us didn't watch televising or looked at the newspaper, we might not know there's a war going on. Our taxes didn't go up, there's no rationing. If you didn't look for it, you wouldn't know the war was going on. Shouldn't there be some way, in a democracy, that we share this burden?
…
You and Barack Obama will appear together at ground zero...on 9/11…Tell me about that.
Wow, what a difference between the two interviews. Granted, there is not one smoking gun question that screams out biased interview, but the side by side comparison of the two "Face The Nation" interviews shows them to be incredibly biased. Obama was given a chance to frame the issues as Obama wanted, and gave Obama lots of oppertunities to attack his opponents. It was very different for McCain. McCain was put in a position to attack his own party. McCain was put in a position to talk about how the opposing party should be in his cabinet and administration. McCain was put in a position to defend Palin from attacks by his own party. McCain was put in a position to defend something that was prefaced as "going to cost the taxpayers billions of dollars". McCain was put in a position to have to defend his oponent's role as a community organizer. McCain was put in a position to talk about how more black people should be part of politics. McCain was asked to discuss a controversial aspect of America's volunteer army. Lastly, McCain was asked to talk about spending a non-partisan day with his fellow American, Barack Obama on September 11th, just to make sure McCain wouldn't take the closing moments of the Interview to go after any of Obama's policies or statements.
I conclude that "Face The Nation" does indeed have huge political bias, at least with regard to this election and the two candidates running for president.
Tuesday, September 30, 2008
Revenue Neutral Tax Will Break America's Addiction to Gasoline
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.
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.
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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