Saturday, August 02, 2008

William Larsen's Economic Stimulas Plan

Another Economic Stimulus Plan

Obama is proposing another Economic Stimulus Plan. This is just plain amazing. Does this individual understand economics at all? Let us follow the money trail.

1. Congress votes and passes a plan to GIVE each family $1,000. Hey we would all like to have an extra $1,000 right?

2. Let us say the president signs the bill and it becomes law.

3. The US treasury is responsible for securing the funds needed to pay all government obligations.

4. This new Economic Stimulus Plan is a new government obligation.

5. The US Treasury looks at incoming revenue and sees that they borrowed money last month to pay the governments obligations. Pretty easy math to figure out that if you already borrowed $700 billion this year, then you will have to borrow the $1,000 time 105 million households to pay this new obligation.

6. The US treasury then submits requests for bids on loaning it $105 billion.

7. The bids come in from all over the world. With cash tight, they need to pay a little higher interest.

8. The interest will be about $5 to $6 billion the first year and compound at 5 to 6% a year. Based on past history, it will never be repaid, just rolled over into a new refinanced US Treasury Note.

9. These new dollars spread abroad will lead to further devaluation of the US Dollar.

10. Further decline in the US Dollar leads to higher imported goods such as oil.

11. This increases the trade deficit that results in ever more US dollars abroad.

12. This in turn further leads to a declining US dollar, increasing the trade deficit more and so on.

This is not an economic stimulus package but a US economic destruction. We cannot borrow or spend our way out of this economic crisis!

We need elected representatives who can make the tough choice between wants and needs. Ear marks must be eliminated.

In 1937 the employee's maximum FICA tax was $30. Today the employee's maximum FICA tax is $8,109. My Economic Stimulus Package would be to repeal the Social Security Act pertaining to Old Age and Survivors Insurance. This would provide not a one-time rebate, but the employee keeping both the employee’s and employer’s portion of the SS-OASI tax totaling $11,424 (maximum wage base).

· It would not result in any borrowing since it is your money.

· You could use it save for retirement, college, pay for health coverage, mortgage and more.

· It would restore a family’s ability to participate in the American Dream where in a land of opportunity, a person can work hard and prosper.

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