(And, By Extension, The World's Economy As Well)
I want to put forth an idea that I've had lately, and I'm sure I'm not the only one that has had it, but I think it is a good idea. And I'm no economist, so maybe there's something I'm missing here, and if somebody who is an economist knows better, let them come forward and explain what is wrong with the idea. But I want to get the word out, and I want to get people who agree with me to start asking the government why we aren't pursuing a plan like this.
We're giving all this money to the giant banks right now. The idea is that, with this influx of cash, the banks will start lending to each other and to businesses and people again. Except guess what? They aren't. They're hoarding the money for themselves. They're too afraid to lend out the money to anyone because they don't trust anyone (since they figure that everybody else must be as corrupt as they themselves are).
So? Fine, I say. Let's take our money back, and set up a federal loan service which will provide loans directly to individuals, businesses, towns, et cetera. We're so worried about getting lending moving again, let's not trust the folks that screwed us over in the first place to do it, let's do it ourselves and let them crash and burn. People need loans to buy houses and cars? Have the government provide the loans directly. We already do this with student loans, so it isn't unprecedented.
And it's not like the government would be the only game in town. The other banks would be free to compete and lend out money themselves if they'd like. Hell, I figure that eventually, when things stabilize, the other banks would start offering better deals than the government could. Healthy competition would thrive. Eventually, dependence on this federal loan service would wane, as capitalism and the free market work their magic and provide better values at lower costs for consumers.
Now, yeah, I understand people that would be upset at this. "You're taking $700 billion from all the taxpayers of the world, and redistributing it to certain people!" Yes, this would be doing exactly that. But the government has already taken the $700 billion. The damage is done. I say, instead of giving it to bullshit fat-cat mismanaged investment banks, give it to the plumbers and the contractors and the home daycares and the small towns. Give it to the people. We are the true engine of the economy. Giving it to the banks -- whether it is through grants, loans, or any other method -- is like refilling your car's fuel tank, when the real problem is that the lines delivering the gas to the engine are clogged.
I've also heard proposals that go to the extreme in the other direction: to just take the money and divide equally among the population of the United States. Each citizen of the US would get about $2,324.50 under this plan. Would I like an extra $7,000 or so for myself, my wife and my daughter? Heck yes. But how much would this really benefit the economy at large? We'd probably see a brief, sharp rise in spending, and then people will have either spent it or shoved it into a savings account, and we'd essentially be back where we started -- just like we did with Bush's economic stimulus package.
But by offering direct government loans to the small businesses, homeowners and car purchasers of the world, we would be stimulating almost every sector of the economy. At the same time, the government would directly earn interest on these loans as they were repaid. And let's be clear about this -- the recipients of these loans would be scrutinized, carefully, and you better believe plenty of folks out there would not be eligible for them. But it's still better than nobody being eligible for them as they are today.
The only caveat I can see with this strategy is the cost of setting up and administering a plan of this magnitude. We truly are talking "Tennessee Valley Authority"-level complexity and scope here. But it sure seems better to me than seeing our millions pouring into the coffers of giant banks, and having nothing good come out of it as a result (except for spa retreats and overseas hunting trips for their executives).
I urge anybody who feels the same as I do to pass this on to friends, family and neighbors. Let's get the media and the government talking about this plan. Write to Senators and Representatives. (You better believe I'm going to.) We are their constituents; they should answer to us and us alone. Let's let them know that, to use a clich´, we want Main Street to be bailed out, not Wall Street, and we demand it now.