by Art Isgur
May 2010, VIEW Issue 26: We know that ‘deficit’ is not a four letter word. We also know that we have both domestic and foreign difficulties. The U.S. Congress may finally be ready to deal with some of our foreign economic problems. By early April, 2010, 130 Congresspersons, of both major political parties, sent a strong letter to President Obama. They urged the President to ‘get tough’ with China and the currency manipulations in which the Chinese engage. Almost everyone agrees that we must do more in helping to create jobs, jobs, and more jobs, in the USA.
This, the final chapter in this series, will deal with plans and strategies to help create these jobs. There is no question about the kinds of jobs we must create for long term growth and stability.
We must build a better transportation system, largely around inter-city rail transportation. There is no reason that we can’t enjoy a trip from California to Boston via high speed rail. Imagine a relaxing two day trip to Boston, without traffic and without a trip to LAX!
In addition to this huge development we need massive investments in green industries, such as solar and wind energy. Where, however, you are asking, will the money come from for these great tasks? It is not, usually, a good idea to raise taxes during difficult economic times. Printing more dollars would probably cause greater problems, within a few years, than what the Great Recession is now causing.
So again, where will the money come from? That is the correct question! We have a rather large number of senior citizens that have placed much of their savings into CDs at their local bank. Interest rates are very, very low, but the money (the principal), is safe. This is not the stock market. You may lose some buying power, (although inflation is still very low), but your dollars will always be there. At the very same time we have the needs listed above, rebuilding our transportation system and investing in the new technologies of the 21st century. How do we create a marriage between the two, (seniors who would like better, but safe returns on their money, and the nation’s needs?)
Please allow me to digress for a moment. I am a great fan to satellite radio. One of my favorite channels deals with old radio programs, (The Green Hornet, The Shadow, Fibber McGee and Molly, etc.) At the conclusion of many of the episodes from the early 1940s there would be a public announcement. The station would remind the listeners of the 1940s to send an important message to Hitler and Tojo... buy Victory Bonds. Help end the war with an Allied victory, and bring home our sons and daughters, alive and in one piece!
Lets synthesize these three different ideas and create something new.
We have Americans with money, searching for safety and more than a 1 percent return on their retirement savings. We have great national needs that, if met, will help America compete in the 21st century. We know some tactics that have worked well on a national scale. Now is the time for REAP (Re-Employ American Personnel) BONDS. Any natural person, age 45 or over, could purchase these bonds.
These are U.S. Government Bonds so they are rather safe. An individual may purchase up to $5,000 worth of REAP BONDS a year. They would bear a simple interest of 3.5 percent a year (payable to the owner at age 65 or over). The interest would be 100 percent tax free. The Feds, within very strict guidelines, would loan the money to the sorts of industries we have discussed (high speed rail, green industries, etc). The firms using these dollars must be AMERICAN COMPANIES, not a subsidiary of a foreign firm. They must employ U.S. workers and must produce goods made in the USA.
The REAP BONDS may be cashed in but never sold in the open market, for the first five years. This, to be certain, is only a skeleton of a plan. All details have not been finalized, but it is a blueprint to help America come back.
The plan is to build upon. To improve. But it certainly seems an improvement over selling bonds to China and buying oil from the Middle East.
Join me, and help America come back.
– Art Isgur, Ojai
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Related Article: 2010: Foreign and Domestic Challenges. Jobs. Pt. II Coming Back
Related Article: 2010: Economic Recovery? Pt. I Coming Back - Incentivized Tax Cuts