If we were to take the $700,000,000,000.00 we're handing to the banks and instead give it directly back to the American public (approx. population 305,709,000 - every man woman and child) that would be about $2,290.00 per person... which would make for a pretty decent financial stimulus. A family of four would get $9,160.00 to put toward their home, car, business, debts or savings.
I'm not a financial expert but that sounds a lot smarter than giving it to banks who are just hoarding it to improve their solvency. Too bad that option was never considered by our elected reps. "Of the people, by the people and for the Fortune 500."
Curious to know what y'all think.
Thanks.
As discussed in the other thread, the bailout now exceeds 4 trillion. $700B would be a bargain compared to reality.
Here is my objection to your suggestion:
If we create $700B in new currency without an equal expansion in production (real value), we will have caused inflation. No different than the price of gold after a huge mine is discovered, or the price of oil when OPEC bumps production- it all comes down to supply & demand.
So the ~$2,300 of free money comes at a significant cost- namely, my purchasing power will decrease proportionately to the flux of new money.
It is especially dangerous right now as we head into a recession, if not full-fledged depression. Production and real value (i.e. home equity) have already plummeted. A surge of new currency create a potentially deadly one-two punch that might only exacerbate the problem long-term.
For your consideration:
http://en.wikipedia.org/wiki/Stagflation