The White House Office Of Creative Affairs : Idea Archive

My name is Richard Heitmeyer and I think we could resolve the mortgage crisis by establishing this program

Citizens Residential Guarantee Program

established to treat the problem
and eliminate the need to bailout Wall Street

Federal Government will establish a Citizens Residential Relief Fund of $250 billion with authorization to increase the fund to $700 billion subject to congressional oversight. These funds will be used to fund a portion of a qualifying property owner monthly mortgage payment dependent upon the citizen’s financial needs.

The funds advanced will become an interest bearing superior first lien against the real estate for which the funds are funding part of the property owner’s monthly debt service.

When residence is sold at a future date the federal first lien will be liquidated. The balance of the funds will be applied to the first mortgage, if these funds are not sufficient to pay the mortgage in full the mortgage holder will incur the loss.

The benefits of this plan are:
1. property owner stays in home
2. property owner maintains home
3. property is not sold at a fire sale price therefore neighborhood real estate values maintained
4. mortgage holder holds a performing mortgage therefore eliminating massive write downs
5. debt service keeps flowing uninterrupted relieving stress on financial institution
6. foreclosure pressures on local courts reduced
7. over time housing prices increase and everyone comes out whole

The Citizens Residential Fund will address financial problems due to
1. resetting of monthly debt service due to improper or misunderstood disclosures to property owner
2. property owner unemployment problems
3. property owner health problems
4. property owner financial problems

The backbone of this country is the residential property owner, deal with his/her problems and the institutional problems with take care of themselves with enforced regulation. The American dream is home ownership lets keep it that way.

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My name is Ernest Earnest and I think we can address the problem of energy and environment by doing this:

We need to develop a strategy to review and prioritize our environmental standards based on trade offs between air quality, green house gas emissions, and economic impacts or benefits. Some technological solutions can provide benifit in all three areas, but many times, what benifits one objective detracts from another.

Congress tends to address one environmental/energy issue at a time without any standard to to balance the impacts/benefits between the three parameters.

As an example of an issue where priorities between air quality, energy independence, and climate change need to be evaluated, consider our need to shift to more fuel efficient vehicles.

We all know that, in order to achieve energy independence and meet our global obligations to reduce greenhouse gases, we must change our driving habits to embrace small fuel efficient vehicles. The Europeans and Asian counties are already way ahead in this regard. The fleet average fuel economy in Europe is already better than our congressionaly mandated CAFE standards for any time in the future.

The most fuel efficient vehicles sold in Europe cannot be imported to this county because their emission and safety standards are different than ours. Ford sells a car in Europe that gets 65mpg, but we can not import it. Over 50% of new cars sold in Europe are diesel, but our emission standards are different so only a few are available here.

Our long term goal should be to reconcile the differences between European and US standards. If we were to accommodate the current European standards on a temporary basis to allow importation of the most fuel efficient vehicles now, it would, not only speed up our move toward energy independence, but allow US manufacturers to develop “world cars” that could be sold anywhere thus improving our export market.

Adopting such a strategy, might have a small negative impact on air quality, but how do we evaluate that relative to our goal of energy independence and mitigating climate change. But, how do we decide how to balance? we need trade off standards. Any ideas?

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My name is River and I think we can address the problem of providing universal health care for all by doing this:

Group Americans into regions for the purpose of health insurance. For example, group together Oregon, Washington, and Idaho as the Northwest Region. Each region would have a director, either one elected by the people of the region or one appointed federally or at the state level.

The Office of the Health Care Director would invite insurance companies to compete for the privilege of serving the group. Rates would be set by law, and insurance companies would not be able to discriminate against insureds who have “pre-existing conditions”, nor would they be allowed to practice recission. Maximum lifetime caps on insurance would also be forbidden. The Office of the Director would choose a plan from among those offered, taking into consideration cost per individual, cost per family, and comprehensiveness of medical and dental service offered. That plan would then become available to every member of the region at a reasonable cost. This would allow regions to take advantage of group rates rather than forcing individuals who do not otherwise have coverage to attempt to buy insurance on their own, which is often problematic.

If some of the people in a given region did not like the region’s health insurance plan, the health plan used by members of Congress would be available to them, also at a reasonable rate (set by law).

Subsidies would be available to those who cannot afford to buy insurance on their own. The subsidies would reach individuals and families whose incomes were up to 300% of the poverty level in that region or state. They would gradually be phased out as the income level approached 300%. This could potentially be funded by an extra tax on the sale of property with a currently assessed value of over $300,000. The assessed value would be determined by the entity to which the property owner pays property taxes.

Doctors would see the value of accepting this insurance, since they would only be dealing with a single entity to get paid for their work. The insurance company chosen by the region would need to agree to pay claims in a timely manner (no more than 30 days for any reason) and it would be stipulated that the insurance company, which is not practicing medicine, would not question the doctor’s recommendation for treatment or preventative steps. Nor would the insurance company be permitted to deny care as long as premiums had been paid within 31 days prior to the treatment. Doctors, in turn, would be forbidden to own testing facilities such as cancer screenings, mammography, bone density scanners, and MRIs, unless they worked in the scanning facility as a results interpreter and in no way saw patients or made recommendations to patients for further care.

Businesses would be encouraged, via tax breaks, to contribute up to the full sum of an employee’s premium. Businesses that contribute nothing (or less than a specified amount or percentage of premium) to an employee’s premium would be taxed and that tax would help to pay for tax breaks for business that do contribute.

All medical records would be kept electronically, to be accessed by any of a patient’s doctors, and all imaging facilities would upload the images to the patient’s electronic file.

Prescription drugs would be covered, and the patient would have sliding co-pays for prescriptions such as $5 for preferred generics, $10 for more costly generics, $20 for some preferred brand-name drugs, and $40 for the other brand-name drugs. All prescription drugs would be on the insurance plan’s formulary, as would be required by their contract with the region and by law. Regional plans would be encouraged to research the best and least expensive source for prescription drugs and/or negotiate the best price with the pharmaceutical companies.

People with chronic conditions requring ongoing medical treatment would be encouraged to perform these treatments at home rather than in a clinical setting. Patients would visit their clinics once a month or so in order to receive patient education, have laboratory samples taken (blood draws, urine sample if necessary), and for monitoring purposes.

The emphasis in treatment would be preventive care rather than treatment of disease once disease is established. If lifestyle modification will help to prevent a disease from occurring, it can be prescribed by a physician. Classes in lifestyle modification following medical guidelines should be included in coverage, and failing to even attempt said lifestyle modification could possibly incur penalties of some sort, perhaps a percentage of co-insurance to be paid by the patient until he or she starts the prescribed lifestyle modification and sticks with it. If the patient is diagnosed with diabetes or pre-diabetes, visits (at a minimum, one initial visit and one follow-up) to a Certified Diabetes Educator should be covered.

A number of mental health visits to a therapist should be covered each year for patients who need this or feel they need it. Full dental coverage should also be a part of this plan.

While office visits may incur a small co-pay, co-insurance would not be required except for situations where the patient is being penalized for not making any lifestyle modification changes.

Since the regional plan and the federal plan would be the only plans in the region, doctors and other health providers would, of necessity, lower their bills to meet the payments from the insurers. Doctors and other health professionals would be forbidden to balance bill patients if reimbursement rates are lower than they would like.

Malpractice insurance would also be regulated and rates would be set by law. These plans, too, would be regional, enabling health professionals to obtain malpractice insurance at a reasonable rate.

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Hi, my name is Ross Nicholson and I believe this is how we can win the war on crime as well as the war on drugs, end the American police state, and end incarceration in our country.

Both criminal behavior and addictive drug seeking behavior are amenable to pheromone therapy. 150 mg of older adult male facial skin surface lipid (yes the grease on the end of your noses, gentlemen) p.o. (by mouth) cures these behaviors and appetites instantly. n =92. The change is detected within 24 hours. The teenager asks, ASKS to do chores. If a drop out, the teenager returns to school, grades improve dramatically. The former drug-addicted delinquent with a 24 year old sex partner becomes instead and instantly, the pride of his/her mother and father–and the sex partner is ditched in favor of parent-approved age-appropriate social interaction.

The facial skin surface lipid is passed in kissing between the father and the child. It consists of more than 725 chemicals with the quirky stereochemical characteristics of chemicals known to be pheromones in other animals. One component, sebaleic acid, is found nowhere else in nature and marks us all as human. Side effects include jealousy and a following of the donor effect, both last less than a week in most cases.
100% of probands recovered from delinquency and/or drug addiction. There have been 92 trials so far, every single one has been a dramatic cure.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 006E)

This comment was made by DrFaust on the issue of Corporate Ethics at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

There is no doubt that mismanagement in corporations has helped to set up a number of problems in our economy, including our current financial crisis. You are right that one of the reasons for this is the exclusive interest of the corporation in short-term profits; being an organization of investors (shareholders), a publicly traded company feels compelled only to satisfy the interest of shareholders, just as a democracy feels compelled only to satisfy the interest of its citizens. Respectfully, however, I believe your call for corporate democracy will be immensely difficult for the Obama administration to achieve within the bounds of law. While we can certainly call for public responsibility by corporations, it will be the consumers and the shareholders, not the government, that inevitably decides whether or not a corporation should profit at the expense of stakeholders such as workers. Like in government, democracy in a corporation tends to be limited to those who elect the corporation’s leaders – the shareholders – rather than to all people who contribute to the government’s well being, and this is unlikely to change.

I’m sure that you would agree that, given the lack of a framework for truly democratic corporation, an alternate route to giving stakeholders (rather than just shareholders) a voice in the policies of the corporation is to ensure that an appropriate balance exists between corporations and other centers of power in the economic world, such as labor unions and consumer protection groups. In other words, rather than changing the way corporations decide how to use their economic power, we can change the way power is distributed within our economy. Thanks to decades of anti-union propaganda from the right and thanks to administrations that have been increasingly unfriendly to labor over the past 50 years, union membership and bargaining capabilities have declined significantly over the recent past; we should be vigorously involved in reminding the public why unions are important and in pushing for pro-union policies if we wish to see an appropriate balance restored.

By fostering economic competition, we can increase the ability of another stakeholder you described, the suppliers, to influence the policies of corporations, further diffusing economic power. The best way to do this will be to encourage small business growth, rather than massive economic entities, in our tax code, and to adopt policies that spur wide economic growth in order to make the growth of these small business possible.
Another problem with the immense leeway we give to corporations is that, in a globalized economy, corporations’ self-interest often drives them to create unsustainable economic systems. Most corporations in the world depend on the US to purchase their products, and Americans have seldom refused to oblige this demand. However, because companies’ profit depends on how much money they have to spend in addition to how much they sell, corporations seek ways to reduce their expenses, often by outsourcing jobs to countries with lower standards of labor. Unfortunately, the workers in these countries are too underpaid to buy as much as in the United States, where higher standards ensure higher incomes. Thus, as jobs and wages leave the United States, diminishing our ability to buy goods, the world continues to depend on American workers to purchase their exports. Americans have solved this problem in the past decades by taking on massive individual debt, and this has contributed immensely to our current recession and a host of other social and economic ailments. In order to fix this, we must take immediate steps to stop the outsourcing of jobs, such as altering our tax code to end benefits for companies that outsource jobs, and to break down the immense economic power of corporations, as small businesses will create a diffuse economy with less risk of outsourcing and a more sustainable scheme for the purchase of goods.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 007E) This comment was made by Catherine28 on the issue of Corporate Reform at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

For those of us who donated during the campaign, we learned one thing, together we are powerful. I believe that we can invest with the same vigor we donated. We can invest in new companies and create new jobs. We can help the retiree’s who participate, and have lost money in their 401k’s, because they will benefit from their investment. This will help the entire country…especially if we create a company with a product that cannot be outsourced. Simply put, I am suggesting a company for the people by the people. I would like to discuss this…I see an opportunity for us to help ourselves and help each other.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 008E)

This comment was made by Ted Neros on the issue of Economic Recovery at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

I don’t know if anyone suggested this before so here it comes: Instead of firing 10,000 in a company that say employs 100,000 why not just cut everyone’s working hours by 10% instead? This way nobody goes home without a paycheck but instead everyone in the company gets to adjust for a few months to a lower income. Unemployment benefits could also make up the 10% difference for a while. Wouldn’t that be preferable from the standpoint of unemployment benefits also? Do the math. Six months of 10% supplemental unemloyment benefits vs. a full unemployment check. Employees would get to spend time with their families or look for other full-time work if they wish. I did that when I had my own small business and it worked great. Thanks for listening. Ted Neros

TOP 20 IDEAS FROM CHANGE.GOV (Comment 009E)

This comment was made by asousely on the issue of the Effect of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

My son-in-law was out of work for 7 months until he finally went to work for a local sheriff’s department as a deputy. Now they are trying to catch up and with 2 children in school it is hard for them. Now after purchasing uniforms for work he finds they are changing them all after January 1 and he has to spend over $1,000 more to buy all new uniforms again. So the money he spent on Oct. 1 when he went to work was for naught. In this economy this is hard. But this is how it works. __I live on SS. Disability, it isn’t much but you have to make due with what you can. I tried to get assistance to make my rental unit more energy efficient. Because my landlord would not sign off on it, I couldn’t get any help. This is not right and needs to be addressed. What is our recourse in this?? I can’t afford to update my unit myself on my limited income, and can’t get assistance without my landlords approval. __These are just some of the things people face every day. Home owners have all kinds of assistance available to them but renters are subject to their landlords and as such are unable to do much. Then add to that low income and it makes it even more difficult. ____

For those of us who donated during the campaign, we learned one thing, together we are powerful. I believe that we can invest with the same vigor we donated. We can invest in new companies and create new jobs. We can help the retiree’s who participate, and have lost money in their 401k’s,
because they will benefit from their investment. This will help the entire country…especially if we create a company with a product that cannot be outsourced. Simply put, I am suggesting a company for the people by the people. I would like to discuss this…I see an opportunity for us to help ourselves and help each other.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 10E)

This comment was made by Dave L on the issue of the Automotive Bailout at http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

The root problem is American automakers don’t make cars Americans want to buy, and Americans don’t buy them.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 011E)

This comment was made by GrannyHelen on the issue of the Automotive Bailouts at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

And as long as we’re talking breaking up these co’s, the car industries in particular lend themselves to this because they all have different brands.

I wouldn’t mind seeing the govt buy up the $3 billion in GM’s stock and then break up the brands – Saturn, Saab, etc – and then fund each of these newly formed independent co’s on a base by base basis based on each co’s mertis and viability. Saturn, for instance, seems to be able to turn itself into a forward-looking co, whereas Hummer should be dead as a doornail at this point.

Take these comments with a page from Michael Moore’s call for the feds to just buy GM, do a govt-based restructuring, have the govt turn around and issue new IPO’s for each of these new co’s so it isn’t in the car business any longer than it needs to be, include a mandate for more public transportation and I think we have a winner.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 012E)

This comment was made by KE851 on the issue of the effect of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

We are buying necessities such as food only on sale and barely what is needed. No Christmas presents this year. I am not obtaining health care because I am uninsured, self employed small business owner, and can’t afford insurance even though I have a medical conditon that is killing me. We need to have more incentives/programs to create and build small businesses. The Federal definition of a small business needs revised and should be a business with less than 100 employees and not on the stock market. Small businesses have always been the backbone of our country and we need to help those businesses now. The service industry has been especially hard hit, which includes repair businesses. I would love to see Federal assistance given to the repair industry to incorporate green technology repair into their existing businesses. All machines will break/fail, we need to ensure that we have the trained workforce to repair them. Training existing repair companies, providing incentives/programs to individuals to create, build, and expand repair companies, will create jobs in the new markets of green technology such as alternative energy vehicles, homes, and commercial locations.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 013E)

This comment was made by Andrew on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

I keep on trying to find win-win-win situations and thats really hard to do. The example I originally gave was in two sectors.
By providing money to mass transit companies in exchange for them reducing their fares by 75% and increasing their routes.
They would have to hire more drivers (increasing employment), buy more vehicles (paying sales tax and stimulating companies that make busses, trains and aircraft), the lowered fares would over time result in more rider-ship decreasing consumption of fuel (lowering fuel prices through supply and demand) and decreasing wear and tear on roads and bridges (reducing maintenance costs). People who rode the mass transit would have more money to spend.
The second example was the government would provide special loans (or a bank would provide the loan with government backing) to individuals to install photovoltaic or small wind turbines on or around their property (something to produce electricity). In the southwest it would probably be solar and in the northeast it might be more likely to be wind power but that would be up to the property owner. The electricity would be sold to the grid. Half the revenue would go back to the government to pay the loan (direct from the grid) and half would go to the homeowner or property owner (they’d have more money to spend). The grid could organize communities to act in concert as energy companies. Representatives from the community could act for the community to get better prices for the power produced. More electricity available could potentially lower the cost of electricity, increase revenue to the government (or the bank representing them), reduce our dependence on foreign oil, clean up the environment.
A third stimulus win-win-win might be electric car rental companies that would rent electric cars along mass transit right of ways. They would receive an influx of money somehow. A person could get off a bus and rent an electric car for a really small amount of money. When going to work people could drive up to 50 miles to a mass transit right of way, turn in the car to the rental agency and ride the bus to work. Large fleets of electric vehicles could be purchased by the rental agencies (stimulating car companies).
These are just examples of ways a government grant or targeted loan could be used to increase employment, reduce energy cost, increase government revenue, and put more money in peoples pockets all at the same time. All people consume energy and depend on transportation of some kind which is why I think the stimulus should be targeted there, but maybe you could come up with ways it could be done better. But always with the multiple return increasing jobs, revenue and extra money while reducing cost in some sector by reducing demand or increasing supply.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 014E)

This comment was made by ShariThomas on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

My focus today is on “consumer debt and savings accounts”.

First I’ll address what I considers BARRIERS to savings accounts.

1. There is no consistency in banking regulations which make opening and maintaining a savings account. Some banks require you to open a simple passbook savings with a minimum deposit of $100 to $300. For those banks that allow you to open an account with very little money (as low as $1.00), the monthly fees are fixed rates, ranging from $4 to $5 per month until you have a minimum average balance of over $300.

Why would I want to give money to the bank for safe-keeping only to have the bank eat my money with their outrageous fees?

2. If you are able to make an “automatic monthly transfer” from your checking to your savings account, the minimums are generally $25… too high. The amount should be flexible, just like for investing in an IRA.

3. At the end of the year, after you’ve saved all year long, you’re required to pay income tax on the interest you earned on your savings. Bad idea unless you have more than $1000 of interest income. Why would I want to save my money, pay bank fees, pay interest, etc, only to possibly end up with less than I started with in my savings account?

4. Here are things that will stimulate savings. Make the minimum amount to start an account $10.00. Make it illegal for banks to charge fees on a savings account if you also have a checking account with that bank. Eliminate the income tax on “passbook savings account” interest unless that interest exceeds $1000. Create a 1% tax credit on the highest average annual balance reached in an individual savings account.

Now, about that pesky consumer credit problem.

I personally believe as long as the general American public is kept in debt through consumer credit, it is akin to being in servitude. Being in servitude makes a person weak in the eyes of creditors. It also forces us to carry a burden that could very well be passed to our heirs. We become dependent upon others, not a good position when you want us to become strong.

It has become obvious the “700 Billion Bailout” has not been used as it was designed. It has not freed up a lot of credit, but has been used for further consolidation of powerful banks.

According to Credit card industry facts, debt statistics 2006-… the total credit card debt is just over $344 billion.

1. Use $150 billion of the “bailout” money to pay off consumer credit card debt. Do that by requiring debtors to produce credit card statements. If the amount due on the credit card exceeds $500 or 10% of the debtors existing credit line, pay off the debt in full, and revoke the consumer credit card privileges.

2. If the debt exceeds 10% of the annual household income, pay off the debt and revoke the credit card privilege.

3. Make it just as illegal to advertise credit cards on TV as it is to advertise tobacco and alcohol. All are addictive, so why promote them?

What would all this solve?

It would give most consumers an 18-30% increase in discretionary income if they weren’t paying high interest on credit cards. It would allow consumers to pay their mortgages and car payments and still have money left over for savings.

No, it won’t stop sensible spending.

Yes, it will crush the credit card industry… So sorry charlie, you’ve been predatory way too long.

Let’s have a serious discussion about this.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 015E)

This comment was made by Helen Sheridan on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

To ALL,

I grew up in a family and neighborhood where our parents were involved, as a teenager I was involved and was held to my voting responsible since age 18. My children have always been politically active, and I find it strange how many of their friends do not understand or care about the our systems of government and corporate oversight. We lost so much in the past 20 years, strong education, neighborhood organization, personal involvement.

But as I read each post, I am proud to be an American, because I am experiencing the rising of each and everyone of us to take back our country by participating in everyway possible to be heard.

We are thinking again, sharing those thoughts and hopefully someone in Washington is reading our words and will contact us to build a forum to assist in change. We need more average Americans involved in Washington and less movers and shakers……..

In my next position, I would like to apply many of these ideas

Thanks to all for such good words…keep it up.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 016E)

This comment was made by srid on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

Prof Herman Daly has got something interesting to say (In short, financial and economical crisis have one root cause — overconsumption and overproduction):

Herman Daly on the Credit Crisis, Financial Assets, and Real Wealth
http://www.theoildrum.com/node/4617

The current financial debacle is really not a “liquidity” crisis as it is often euphemistically called. It is a crisis of overgrowth of financial assets relative to growth of real wealth—pretty much the opposite of too little liquidity. Financial assets have grown by a large multiple of the real economy—paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. It should be no surprise that the relative value of the vastly more abundant financial assets has fallen in terms of real assets. Real wealth is concrete; financial assets are abstractions—existing real wealth carries a lien on it in the amount of future debt. The value of present real wealth is no longer sufficient to serve as a lien to guarantee the exploding debt. Consequently the debt is being devalued in terms of existing wealth. No one any longer is eager to trade real present wealth for debt even at high interest rates. This is because the debt is worth much less, not because there is not enough money or credit, or because “banks are not lending to each other” as commentators often say.

Can the economy grow fast enough in real terms to redeem the massive increase in debt? In a word, no. As Frederick Soddy (1926 Nobel Laureate chemist and underground economist) pointed out long ago, “you cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest] against the natural law of the spontaneous decrement of wealth [entropy]”. The population of “negative pigs” (debt) can grow without limit since it is merely a number; the population of “positive pigs” (real wealth) faces severe physical constraints. The dawning realization that Soddy’s common sense was right, even though no one publicly admits it, is what underlies the crisis. The problem is not too little liquidity, but too many negative pigs growing too fast relative to the limited number of positive pigs whose growth is constrained by their digestive tracts, their gestation period, and places to put pigpens. Also there are too many two‐legged Wall Street pigs, but that is another matter.

Growth in US real wealth is restrained by increasing scarcity of natural resources, both at the source end (oil depletion), and the sink end (absorptive capacity of the atmosphere for CO2). Further, spatial displacement of old stuff to make room for new stuff is increasingly costly as the world becomes more full, and increasing inequality of distribution of income prevents most people from buying much of the new stuff—except on credit (more debt). Marginal costs of growth now likely exceed marginal benefits, so that real physical growth makes us poorer, not richer (the cost of feeding and caring for the extra pigs is greater than the extra benefit). To keep up the illusion that growth is making us richer we deferred costs by issuing financial assets almost without limit, conveniently forgetting that these so‐called assets are, for society as a whole, debts to be paid back out of future real growth. That future real growth is very doubtful and consequently claims on it are devalued, regardless of liquidity.

What allowed symbolic financial assets to become so disconnected from underlying real assets? First, there is the fact that we have fiat money, not commodity money. For all its disadvantages, commodity money (gold) was at least tethered to reality by a real cost of production. Second, our fractional reserve banking system allows pyramiding of bank money (demand deposits) on top of the fiat government‐issued currency. Third, buying stocks and “derivatives” on margin allows a further pyramiding of financial assets on top the already multiplied money supply. In addition, credit card debt expands the supply of quasi‐money as do other financial “innovations” that were designed to circumvent the public‐interest regulation of commercial banks and the money supply. I would not advocate a return to commodity money, but would certainly advocate 100% reserve requirements for banks (approached gradually), as well as an end to the practice of buying stocks on the margin. All banks should be financial intermediaries that lend depositors’ money, not engines for creating money out of nothing and lending it at interest. If every dollar invested represented a dollar previously saved we would restore the classical economists’ balance between investment and abstinence. Fewer stupid or crooked investments would be tolerated if abstinence had to precede investment. Of course the growth economists will howl that this would slow the growth of GDP. So be it—growth has become uneconomic at the present margin as we currently measure it.

The agglomerating of mortgages of differing quality into opaque and shuffled bundles should be outlawed. One of the basic assumptions of an efficient market with a meaningful price is a homogeneous product. For example, we have the market and corresponding price for number 2 corn—not a market and price for miscellaneous randomly aggregated grains. Only people who have no understanding of markets, or who are consciously perpetrating fraud, could have either sold or bought these negative pigs‐in‐a‐poke. Yet the aggregating mathematical wizards of Wall Street did it, and now seem surprised at their inability to correctly price these idiotic “assets”.

And very important in all this is our balance of trade deficit that has allowed us to consume as if we were really growing instead of accumulating debt. So far our surplus trading partners have been willing to lend the dollars they earned back to us by buying treasury bills—more debt “guaranteed” by liens on yet‐to‐exist wealth. Of course they also buy real assets and their future earning capacity. Our brilliant economic gurus meanwhile continue to preach deregulation of both the financial sector and of international commerce (i.e. “free trade”). Some of us have for a long time been saying that this behavior was unwise, unsustainable, unpatriotic, and probably criminal. Maybe we were right. The next shoe to drop will be repudiation of unredeemable debt either directly by bankruptcy and confiscation, or indirectly by inflation.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 017E)

This comment was made by Erica Abrams on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

I heard yesterday that the amount of money the big 3 auto companies requested equals about $5 for each man, woman, and child on the earth. And according to economists, they’re going to need a lot more in the next few months.

I wholeheartedly feel that we need to do our best to save viable industries in the US, and I respect America’s great history in the automotive industry. However, are the big 3 giving us any indication that they are positioned to a be viable, competitive industry in the 21st century? I say probably not, at least not in the form they are in now. Considering the need to employ green technology to reduce our dependence on foreign oil, the future for the big three will most likely have to be in building electric and fuel-efficient cars, and in building busses, trains, and other forms of public transportation.

For them to do that, they will need to completely retool, bailout or no bailout, because in the end, people aren’t buying American-made cars the way they buy from their Japanese and German counterparts. Which will eventually mean some form of restructuring, be it through formal bankruptcy or by laying off a large percentage of their workers.

I feel that the best way for the government to step in is to NOT give the auto companies any bailout, but instead channel that money into helping the PEOPLE affected by the economic downturn. Let’s take these billions of dollars and funnel it into four things:

1. ramping up unemployment benefits so that they are comparable to employment wages;
2. helping the auto companies fulfill their promises of pensions and insurance to workers who have given so much effort to these companies;
3. subsidizing education for displaced workers to retrain them for new jobs in alternative energy; and
4. subsidizing R&D for the new technologies that will be America’s leading industries in the 21st century.

Of course, doing something like this may be messy for a while (just like all these other bailout strategies), but I think it makes so much more sense to channel all this taxpayer money into areas that will sustain displaced workers in the short term and help us move toward the technologies that will make this country a leader in the area of green technology. These bailouts are nothing more than a temporary bandaid that keeps a struggling industry alive while siphoning money away from the areas that could help the country in a sustainable way.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 018E)

This comment was made by Andrew on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

Around my area homeowners have to replace the roof every 30 to 50 years or so. If someone could design a photovoltaic array that could be replace the usual roofing material the pay back from energy production might be enough to pay for the roof replacement while adding to electric production in the community.
Maybe in time all roofs would be built that way. Can you imagine all those houses that have been foreclosed on still being a net benefit to the bank because they also produce power. The empty apartment that has lost a tenant still a benefit.

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 019E)

This comment was made by Steve Liebig on the issue of the Automotive Buyouts at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

The notion that we would give 9 billion in taxpayer dollars to GM when the TOTAL stock value for GM is currently 3 billion makes no sense to me. What’s more, the GM plan includes the LAYOFF of 30,000 workers. Baffling.

How about this:

Take 3 billion and buy GM outright. Fire everybody.

Take another 3 billion and give all the employees (with the exception of any who earned over 250,000/yr.) a severance worth two years current salary plus $30,000 in education vouchers.

Take the last 3 billion and retool the physical plant to produce electric cars.

It’s a new federal agency–call it APEC (American Project for the Electric Car)–an agency that could actually turn a profit.

Once profitable, pay the owners–the American people–an annual dividend.

APEC not OPEC, can’t you just see the bumper stickers?

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TOP 20 IDEAS FROM CHANGE.GOV (Comment 020E)

This comment was made by Professor Michael Slyder on the issue of the Economic Crisis at: http://change.gov/page/content/discusseconomy. Please feel free to comment on it in the box below:

I have read a number of comments on this blog and I am both impressed and saddened by what I am reading. I want to help but I need YOUR help. I have developed an economic theory that provides real solutions to real problems (including health care reform). Please visit my educational website at www.containedcapitalism.com and review my work. I am NOT selling anything. I only ask that my work be seriously considered by the political leaders of our country. If my model doesn’t work, I would like someone to tell me why. As an American citizen, I deserve that opportunity. Please sign my petition – they will listen only if others support my effort. Thank you. Professor Michael Slyder

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