As we have seen in the past money can be given to banks, to insurance companies, and to wall street firms, etc. without hesitation. We are talking about hundreds of billions of dollars to wall street while giving only $600.oo to individuals. I would like to see our country do something wonderful and unusual, however not unusual to the founding ideals of the country. That is "for the people, by the people and of the people." What we need at this trying time is something dynamic to lift our spirits, to change our priorities, and to foster economic solvency for all Americans.
The worst imbalance of Democratic idealism is the desire to hold the people's money in the government's hands. The worst imbalancce of the Republican idealism is the desire that monies be held by a select few and corporations. Both parties should be effecting their best qualities, those that meet the needs of all Americans by fostering ownership of assets by all working individuals.
What I'm proposing is the idea that the monies that are slated for bailouts on wall street be given to working individuals to be placed in special IRA accounts, SPIRAs, that would be owned by these individuals.
These accounts would be established at banks that are FDIC insured, and these banks would have to pay a minimum of 6% interest on the accounts or can offer more to foster competition. The idea is that the interest earned on these accounts could then be used to pay the benefits for the individuals. The first priority of course would be to pay for medical coverage. Only the interest generated by these accounts would be used. The principal would not be touched. The interest earned and used to pay for the benefits would be tax free. These accounts would be strictly regulated and would have to be passed on to designated beneficiaries fostering future substantial accounts owned by the next generations. Of courese, the immediate effect would be an infusion of cash into banks to increase liquidity while creating a foundation of assets for working Americans.
Possible sources to fund these accounts:
(1) direct substantial stipends from the federal government possibly based upon age and work history.
(2) if there is to be an increase in capital gains tax, the added taxes could go into these accounts.
(3) estate taxes could be allocated to these accounts.
(4) allow transfers to SPIRAs from any IRA, 401K, etc. without tax consequences.
(5) allow voluntary deposits to SPIRAs affording some tax deduction.
(6) for working people who are 62 and older and collecting SS benefits and have earned income, the amount lost from their SS benefits ($1.00 for every $2.00 earned) would go into these accounts.
(7) people making under 50,000.00, or more for married couples, could make contributions to SPIRAs that would be partly matched by the Fed. Gov't.
These are a few possible ways to increase the principal of these accounts while it should be understood that once the money is placed in these accounts it cannot be touched. Only the interest generated could be used for securing benefits. The benefits of these accounts would be far reaching and will be discussed in later blogs. The medical coverage generated by these accounts could supplant medicare, a problematic system. If an individual is earning more and her or his account grows faster that should be seen as a plus as these individuals and their beneficiaries could be removed from medicare and possibily from SS as their generated interest grows substantially.
Tomorrow I would like to expand on the possibilities and ramifications of these SPIRAs. What I am asking is that our President and our Legislature do something imaginative and inspiring that benefits all Americans not just a few.