I read this post earlier: http://blogmaverick.com/2009/02/03/my-idea-to-help-the-economy-and-the-credit-crunch/trackback/ – it’s about Marc Cuban’s idea for economic stimulus. Go read it and come back – it’s great…

Go ahead…

I’ll still be here…

Did you read it?

Okay, now – Marc Cuban’s concept is simple. Encourage people to save – and encourage banks to lend. That will stimulate the economy. Awesome…

But I think there’s a fundamental problem.

What about the people who have little or no money left to save?
What about the people who’ve lost jobs or taken pay cuts?

And what do you do with the $900 billion stimulus package congress is working on right now?

Here’s a thought: Instead of using ALL of that money to completely bail out failing corporations and banks – bail out the American taxpayers who are hurting.

How?

Take the last three years tax returns (gross income) from households that make less than say – $150,000 annually. (This number could be based on tax brackets or even regionally based depending on average-per-capita incomes.) But for this post, let’s keep it simple.

Average those gross income numbers and divide by three – give that amount to each household as money they can deposit into a savings account at a bank of their choice.

(Banks can compete for your deposits with interest incentives – and for one to three years, interest on these accounts could be tax free, just a thought…)

Back to the “how” part…

By way of example, take these three made-up gross income figures:

2006 – $77,000
2007 – $68,000
2008 – $56,000
————–
Average – $67,000

Divide by 3 = $22,333

Take that amount $22,333, which should be about 4 months worth of income – and give it to this made-up hurting American household so they can deposit it into savings.

This approach would help the American citizens who need it most, put money back into the banking system and with 4 months of income in savings – it should stimulate consumer confidence and spending.

To KEEP the money in banking system, put some stipulations on the money. For instance, put a percentage into a certificate of deposit or some other instrument that slows down access.

That would allow people who are in a bind to catch up if they need to and still have something left in savings.

What should the cut-offs be?
What should the percentages and averages be?
What should the stipulations be?
Would things have to be figured out on a per household basis?
(Well, taxes are – so maybe this could be too?)

As to the rest, I don’t know – I’m not an economist, I’m not an accountant.

I’m just tired of seeing big failing corporations and banks get handed billions of taxpayer dollars only to overpay execs, give out billions in bonuses and plan lavish parties for the people who helped get us here in the first place.

Your thoughts?

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