Sure we can leave the fate of our capitalist system in the hands of Obama and his band of Merry Marxists, but what fun would that be?
Here is a plan so simple that there are probably some flaws in it somewhere, but to me it makes sense.
The banks should all get together and offer a special investment product that offers one interest rate for a one year commitment and something better for two years. Tie it in with a special tax rebate offered to everyone. Make it easy so that $100 or more can be direct deposited into this special account. Then finally give it a big patriotic government sell. "Save $100 for a year, help save our economy" something like that.
This is a simple, free market way to get hundreds of billions of dollars into the banking system while actually benefiting the taxpayers. Instead of interest going to foreign investors buying up our future, the interest on this "loan" of sorts goes to the American taxpayers.
If one hundred million recipients of rebate checks sign up for this, we put a trillion dollars at least into the banking system. The money stays at home rather than going off to China.
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There is a lot of gloomy talk about the fact that even Americans of means have cut back their spending. In the short term this contracts the economy significantly.
In the long term, this might be a positive step. Part of our national problem is the general lack of savings by individuals. This recession could change spending habits for the better, encourage savings, and strengthen our financial system down the road. The economy will restructure and it will not be pretty, but at the end of the day the nation might emerge in a better position than before. Already we have seen our trade deficit shrink considerably. More money in our banks means more capital for loans.
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