I dream of living in ... a World Without Dictators! I'm a Libertarian Paternalist in Slovakia - Freedom with Responsibility - 10% of income into your own Pension; Tax Loans for education, health, housing; now supporting Employment Maximizing Companies!

No More Bailouts

Megan McArdle notes: how messy is the 'New Deal' experimentation, and asks if anything will work or if the economy is just hosed?

House construction is hosed for a few years.
Newspapers are hosed thanks to internet.
The prior Financial System is hosed. 

Overpaid American jobs for which there is an import substitution are hosed.
Overpaid service jobs that depend on above overpaid buyers are hosed.

Some $60 tr of fictitious, paper value has disappeared, so there is no need of overpaid Big Bank financial folk to optimize the yields from it.  All top 50 banks or so should be allowed to go belly up.  Especially Citi, Goldman, & Morgan -- any bank with more than $1 tr in unknown value derivatives; and AIG, too.

Smaller banks should be given 1% loans from the Fed equal to the amount of loans they've made to non-financial, non real-estate companies.  The Depression credit crunch was because all the banks stopped lending.  If only small banks now lend, and all big banks die, there is not much real credit crunch.


Print the money to send all US tax filers $5 000, or $10 000, for Christmas.  They'll spend it (good), or save it (good), or pay down debt (including mortgages; good).  No higher tax, no higher interest rate.
With CPI dropping, no fear of inflation. 

Those previously overpaid folk need new, mostly lower paying jobs.  Nobody knows where they will come from.  They will come faster, and more from the market, when consumers have cash to vote with their dollars on what they want more of.

Now would be a good time for the Feds to offer special 'new company' tax relief for companies hiring new employees, or expanding their employees.

Posted by: TomGrey at 11/25/08 17:50 | link | comments (1)
politics, economics

Comments:

#1  01 August 2009 - 07:53

 

Tastes differ.

Anonymous

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