Divide it up among every man, woman, and child who is a citizen of the U.S. and it’s over $2300. A family of four would receive nearly $10,000. What could you do with that money? Would you be able to invigorate the economy better than our government?
Don’t get me wrong – I’m not advocating that this is the way this bailout money should be spent. I’m instead alluding to some basic political philosophy: who would be better stewards of this capital investment, the government or the people? A role of government is of course to provide infrastructure for the benefit of the people, and the banking system is certainly part of that infrastructure. I think of it this way: the banking system is like our water system, and the banks are like the pumps. A certain amount of this bailout obviously needs to go into maintenance of the pumps. But $700B? We’ll wind up with Ferrari pumps for certain, but what good will it do when there’s nobody turning on the water at the spigots?
I would like to see a certain portion of this bailout – $250B sounds like a nice, round number – that is devoted entirely to infrastructure. We need new bridges. More telecommunications bandwidth. Free flowing student loans to worthy college-bound kids. Small business innovation research grants could be quadrupled, or more. Tax incentives could be given to people to retrofit their vehicles to compressed natural gas (CNG), or to buy electric vehicles, or to retrofit their homes to charge up their CNG and electric vehicles.
In “The Hydrogen Economy”, author Jeremy Rifkin estimated that $10B would pay for an entire nation-wide hydrogen distribution infrastructure, making hydrogen fuel cell vehicles practical and completely (read that again: completely) breaking our dependence on foreign oil. Even if he was way off and it cost us $30B, we’d have plenty of this $250B (just a portion of the $700B, mind you) left over for other infrastructure projects.
It’s been said that the American economy needs this infusion of capital to avoid slipping into recession. What if there were a way to infuse many times this much capital into the American economy without costing the taxpayers a dime? We’re talking trillions of dollars in investment money flowing in from around the world. While money doesn’t solve all problems, not having money causes more problems. Sound like a pipe dream? It’s not, and it’s possible with a fundamental change to our economy’s revenue strategy. Open your mind to the possibilities and check out FairTax.org. I was a skeptic at first, but when I read the assessment of Alan Greenspan that a consumption based tax plan like FairTax would result in trillions of dollars in expatriated funds and outside investment flowing back into the U.S. economy, I was convinced.
The biggest objection to the FairTax plan is momentum: “it’ll never happen because too many people don’t want it to happen.” Being a bit facetious here, but what if we took some of that $250B in infrastructure investment I’m advocating (again, as just a portion of the $700B) and we bought those people off and gave them one-way plane tickets to China? Momentum objection removed.
If you want to learn more, read these books:
“The FairTax Book: Saying Goodby to the Income Tax and IRS”
“FairTax: The Truth”