Joe Levi:
a cross-discipline, multi-dimensional problem solver who thinks outside the box – but within reality™

The RIGHT way to stimulate the economy

The Current Problem

The problem with our current economy can be boiled down to a couple things.

First off, everyone is “too heavily leveraged.” That’s a fancy way to say we’re pretty deeply in debt, every single one of us. We use variable interest rate credit cards to buy everything, and our mortgages are likely variable-rate as well. “Variable-rate” is a fancy way to say “the people lending the money get to pick the interest rate they’re charging you.” The higher the interest rate, the longer it takes you to pay it off. Also, we’re drowning in taxes; we don’t have enough “take-home-pay” to make ends meet. Some would say that’s the cause of the “credit card” lifestyle, other’s would say we’re not living within our means. To both I say it would be a lot easier to live within my means if I wasn’t taxed as heavily as I am.

Secondly, as times get tighter, interest rates rise and jobs go away. This means that people are putting less money back into the economy, which means the people that would have served us that meal, or stocked those shelves have less money to put back into the economy. Further and further down the spiral goes until we hit bottom and try to climb.

It doesn’t look like we’ve hit bottom yet. That’s the scary part.

The Boston Tea party

The Boston Tea party was a revolt by The People over an 11.67% taxes on tea. 11.67% folks. They were so ticked off over 11.67% that they dresses up like Native Americans and threw 90,000 pounds of tea overboard in protest.

11.67% was extreme, and they wouldn’t stand for it. Eventually, this and other circumstances led to the Revolutionary War, the Declaration of Independence, and America as we now know it.

Today’s Taxation

When I go to the store to buy anything I’m charged a 6.5% sales tax. When I buy gasoline I have to pay almost 0.50 per gallon in gas tax. When I pay my utility bills I’m charged even more taxes. What’s disgusting about all this: it’s money that I’ve already paid approximately 30% income taxes on!

Every fortnight when I get paid I have to pay income taxes to the State and Federal Governments. I have to pay “health tax” to Medicare and Medicaid. I have to pay “retirement tax” to the Social Security Administration.

The Real Fix – Interest Rates

First off, we need to do something about companies charging runaway interest rates. For example, if I have a Discover card that charges me 18.99% interest, SOMETHING should be able offset that rate. An idea I’ve tossed around, make that rate bi-directional. In other words, if I have to pay 18.99% on a negative balance, why not make the credit card companies pay ME 18.99% when I have a positive balance? The government has seen the light with interest rates and are now forcing lenders to pay off the highest percentage rate first, thereby allowing customers to pay off their debts faster.

Second, we’ve got to do something about taxation. The current administration’s plan is to jack up the tax rate so that they can give it back to you, build roads, make jobs, etc. This is wrong and will only stall the recovery. Put the money back into the hands of the tax payers first!

This will mean suspending non-essential government programs, cutting back on raises and benefits, putting in a government hiring freeze, etc. Does any of this sound familiar? Your employer is probably already doing this! Why shouldn’t the Federal Government? With the money this saves give half back to the people right now and use the other to pay down the national debt. This should be continued until the debt is paid off and once we’re out of this recession a “rainy day fund” should set up to help cover should something like this happen again in the future.

Can you imagine if the working individual immediately got a 15% to 20% raise (in the form of “paycheck tax” reduction). That would help put spending money back into the economy, which would drive the need for more local jobs, which would then stimulate the local economy even more!

More taxes and “stimulus packages” aren’t the answer. Lean, small government, elimination of non-essential government programs and expenditures, and returning the money to the pockets of the people, that’s your real solution.

Do your Legislators agree?


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