## Monday, September 6, 2010

### Add It Up And It Still Smells - 2

Labor Day.

It seems like a different holiday during times when labor has been shafted for years now by the elite 1%, working top hat and white glove with the federal and state governments, doesn't it?

Some time back in a post Add It Up And It Still Smells we looked at some numbers to show what would happen here in the U.S. if we spent as much money on middle class and poor citizens as we did bailing out reckless banksters.

In this post we will look at some numbers to show what would happen here in the U.S. if we spent as much money on middle class and poor citizens here as we now spend for warsters who are waging seemingly endless wars around the globe "to insure our security".

Instead of paying corrupt politicians in Kabul or Baghdad, what if we targeted Americans to be recipients of U.S. tax dollars?

A simple hypothetical and some simple arithmetic show that something may be fishy in warster land.

For sake of the hypothetical, assume that there are 2.5 million homes in foreclosure. Further, assume \$2,000 as the median monthly mortgage payment for each home.

In this hypothetical, to get money into banks, and to prevent foreclosure on those homes, assume further that we (government) as a financial rescue plan send a check with the home owner and the bank as payees.

That is, both have to negotiate it. The home owner signs the check and gives it to the bank as the mortgage payment. It is deposited and thus it is in the bank.

In this scheme, the home owner owes the U.S. that amount and will pay a small interest over time; and a lien attaches to the home. It can be paid off early if the home owner wants to and can do that.

Finally, assume that we will do this long enough to get the home owner through the recession; which we will assume will be a 3 year period of time.

The arithmetic on this hypothetical would be: 2,500,000 * \$2,000 * 12 * 3 = \$180 billion.

Hypothetical results: 1) the housing crisis would be substantially eased because foreclosures would go down and property values would be positively affected (even if the property value holds even); 2) money would go into the banks; 3) which the banks could then loan out; 4) and the government would have a lien on the property for security.

NOTE: the example is not for the purpose of advocating socialism or the like, it is simply to show a contrasting equation and methodology to assist in the housing crisis.

Instead, under the current bailout plan the government has given ten times that amount or more (\$750 billion plus annually) to failing warsters who profit on war.

Those institutions spend taxpayer dollars overseas, same as the corrupt foreign governments we give billions to.

The government is not in a secure position on that expense / debt either, home owners have been bypassed, not included, so no foreclosures are prevented by wasting money on war.

As to the auto industry. Use the same formula for 7,000,000 vehicles a year with a \$900 monthly median payment, and the arithmetic results in \$226.8 billion going into the banks, and the auto industry sells 7 million cars a year.

So the total looks like \$226.8 + \$180 = 406.8 billion, which is about half of the annual give away for whoopee wars figure, and we will have put \$406.8 billion into the banks, induced 21,000,000 vehicle sales, and saved 2.5 million homes as well.

Add some infrastructure spending such as power grid upgrade, wind farms, solar thermal power generators, other renewable energy projects, and soon enough the unemployment figures decrease as tax revenues increase.

Surely, then, there must be 50 American ways to do it better than the foreign way it is now being done?

The next post in this series is here.

1. 3 years to return to full employment? guess again. 9.6% unemployment getting checks and 9.1% unemployed no longer getting an unemployment check = 20% unemployed in a country with a would-be 160 million workforce = 30 million kpb;ess. and we're adding less than 100,000 new jobs a month while 147,000 young try to enter the workforce monthly! so at this rate, in 2031...

not one dime was given in the stimulus to the SBA for new small startups. 1 million of those if the only way to handle this DEPRESSION! and baby , the food riots are getting close. by winter the no-check unemployed will be 15.4% and that means riots and rebellion... and martial law and the rest of the plan.

2. There is no guess about any return to full employment in the post, so there is evidently a reading comprehension issue with the taz.

We spend more on warsters than all the rest of the world combined.

Had we not been doing that our budget surplus would have continued with a likely result that unemployment would have decreased to all time lows.

3. Randy,

I take it that you are talking about the Clinton surplus handed over to the Bush II regime.

Yes, the bushie neoCons chose war and poverty over prosperity and peace for the people of America.

Fascists tend to do that.