Another Idea in a Shrinking World

You can find the Tally here, and it is not good! The GDP decline of 0.3% is minimal, considering the total uproar of the financial crisis. You could get a decline that serious if the Dog simply got Sick. The Dog died with the 8.7% decline in disposable personal income, a Death Nell in an era of Bank and Credit Card restrictions of Credit flow. The real Problem for the future came in a 2.9% rise in core prices, after a 2.2% rise in the Second Quarter. I don’t like the Thought of a Second Stimulus Package, but the Inventory buildup of $89.1 billion over two Quarters makes me think of a Drink at 8 am; especially after the personal consumption index rising 5.4% year over year. We need the flowing Credit simply to maintain Our current position, and both Treasury and Fed know that Banks are jockeying for position with Buyouts and Dividend payments, not extension of Credit.

I am thinking hard about what economic ploy can be utilized in replacement to a Second Stimulus Package, where it will disappear like Water on dry Sand with as much effect; it would only add further weight to the pressure downward. I am toying with the very Socialist idea of a system of borrowing against back Paid Taxes, where the IRS would become the lender of last resort. The scheme of the Package being that Taxpayers could apply for such a loan up to 20% of the taxes paid over the last 5 years, where the IRS can determine that the loan is a viable Risk, and the Interest on the loan would be 4.2%. Repayment of the loan would be made in additional Payroll or Quarterly Withholdings to match Repayment and Interest. Some Economists will notice this is a sneaky way to actually increase Taxation, but Who said I didn’t have a devious and diabolical Mind?

I suppose, at this time, I should present my Reasoning for the Plan; this is where it will be dismissed on Points. The loan value dependent on past Tax payments would give some assurance that the loans will be as viable as the individuals and firms taking out the loans. More successful Income-Earners will receive higher Credit status than ordinary performers, thus providing incentive to quality performance. We already possess the loan extension and collection entity to capture all elements of necessary program use in the IRS. Banks and Credit agencies will be sidestepped in a one-time extension (repayment will have to completed before further funds extension), while the Interest on the loans will be an excellent tax revenue supplement. I will have to mull over the idea in greater detail, but Readers should remember that it is hard to devise economic policy in the face of all the garbage Politicians have thrown on the garbage pile. lgl