Proposals for Obama, update
on November 19, 2008
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- Effective immediately have the Tsy make all FICA payments on behalf of employees and employers. Leave this arrangement in place at least until it is deemed that the economy is growing too rapidly.
These payroll taxes currently reduce income by about $1 trillion per year for employees and employers and are highly regressive.
Removing these payroll deductions will immediately add about $20 billion per week of ‘spending power’ to the economy on an ongoing basis, and all the funds benefit workers and businesses.
- Effective immediately distribute $100 billion in unrestricted federal revenue sharing to the states on a per capita basis.
- Make another $200 billion of federal revenue sharing available to the states for general infrastructure repairs and projects.
This will effectively increase take home pay, remove a cash drain on business, address infrastructure needs, and support employment and income in general.
What Wall St. and Main St. need most are consumers who have the funds to make their mortgage payments and car payments, and be able to buy what the US can produce.
This ‘bottom up’ approach will work, while the current ‘top down’ proposals may eventually show results but will take far longer to reverse the current slowdown.
And while my proposals will result in an immediate recovery, they do not address the energy issue.
Any recovery will drive up energy prices if consumption is not first reduced by both the private and public sectors.