Economic News
By; Carlos Arvizu Sr
Many citizens are deeply concern with the direction the economy is going. Many hard working people are concerned with losing their jobs, homes, or have seen their 401k's retirement investments dwindle 40 to 60% in value over the last year.
Fixing the problem, one must understand the problem, and how they relate overall to the economy.
1. Congress can use stimulus money by way of reducing or eliminating the taxes from all passbook savings accounts, up to at least $150,000 per year on all personal income taxes. This gives the American public an incentive to save.
2. Regulate the passbook savings rate that is tied to the 52 weekly average of the 10 year Treasury Note, minus 1% point on all passbook savings accounts. What that does, is flood the banks with money.
This will not only encourage the American public save but also give banks an incentive to lend, this forces them to lend.
3. A Stimulus, is something that creates, and encourages new Jobs, or improves stability in existing Jobs that help move the economy forward. The average American appreciate the tax credit the Stimulus provides, however, most don't realize, that's really a token, which we can't afford, do the math, its very costly.
4. Give American taxpayers a shot (Stimulus) in the arm, by giving them a tax deduction of interest for buying and financing a major big ticket item, such as major appliances, cars, planes, boats that are manufactured in America, (at lease made partially in the U.S. (That's a real incentive to create and keep jobs.) I am not saying to have a trade war, but for Americans to have a choice to help keeps their Jobs here in the U.S. or find themselves displaced in the future to foreign companies that now taking place and losing jobs here in the U.S.
5. Reduce the Capital Gains tax to 5% (Remember this, taxes are non productive, more is less, less is more) Most people think that capital gains relief is for rich investors, that's far from the truth. Realize this, that most Americans who own a home, or the average person who is not a homeowner who has a 401k they invested in mutual funds, stocks or bonds or has a small apartment unit they own, also that falls in that category.
Having a Capital Gains tax of 5% federal government and 5% to the state does not takes away revenue, it actually adds to it by creating cash flow (Stimulus) to the government in volumes by giving an incentive to sell and cash in paying a fairer tax, versus holding on forever, paying no capital gains taxes and passing it along to your heirs,who get the stepped up basis. Paying very little, if none in capital gains taxes.
6. With regards to the current toxic loan problem that banks have on their books, pool those loans to a National Clearing House, and Lease those homes out with an option to buy for renters who want to own a home. Giving them a three year window to exercise the option to buy, these renters would have an opportunity to own and be a productive part of society. There of course would be conditions over that three year period, but that would at least make a non performing asset into a healthy performing asset that is at least bring in money each month. That's a Win, Win, not only for the taxpayers, but also for the tenants and the economy.
With respect to the Housing Market, and The Foreclosures that were attributed with the Toxic Loans on the market. If you want to fix it, and create some stability in the market, you don't need to raise taxes, you don't have to give away hundreds of billions of dollars away like candy. We just need to Think. We need to raise the confidence of the American public and the real estate market; the stock market will fix itself by that confidence. We also need to stop listening to the doom and gloom news a little. The News is a self perpetuating attitude of doom and gloom, it won't go away like a head cold, unless you solve or fix the problem. We Need to really look at the problems and solve them, not add to them.
Carlos R. Arvizu Sr.
562-755-3856
Downey, CA 90241
TheDon1950@aol.com
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