Sunday Musings: My Personal Bailout Plan

OK, I have to admit it, the following is not my idea, but it was sent to me by reader John, and I believe it’s currently circulating on the internet.

It is is one man’s great alternative to a different bailout approach. It’s simple, funny, on the spot, certainly beats the alternative and is a worthwhile read:

I’m against the $85,000,000,000.00 bailout of AIG.

Instead, I’m in favor of giving $85,000,000,000 to America in a “We Deserve It” Dividend.

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a “We Deserve It” Dividend.

Of course, it would NOT be tax free.

So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife have $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage – housing crisis solved.

Repay college loans – what a great boost to new grads

Put away money for college – it’ll be there

Save in a bank – create money to loan to entrepreneurs.

Buy a new car – create jobs

Invest in the market – capital drives growth

Pay for your parent’s medical insurance – health care improves

Enable Deadbeat Dads to come clean – or else

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it…instead of trickling out a puny $1000.00 (‘vote buy’) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!

As for AIG – liquidate it.

Sell off its parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can ‘never work.’

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion “We Deserve It” Dividend more than I do the geniuses at AIG or in Washington DC.

And remember, this plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest.

There you have it. Does this idea invoke pleasant feelings or do you feel better knowing that AIG is being bailed out?

Just for fun, I have asked some clients and friends as to what they would do if they received a tax-free windfall of some $300k. If I take their ideas, and assume that others have similar needs and wants, and multiply those by 200 million recipients, I’ve come to the conclusion that the current recession would be over in no time and an economic boom of enormous proportions would result.

Yes, it’s simple and an economist could shoot holes in that idea. But what the heck, I have to admit that thinking about the implementation of such a positive action plan makes me wonder if it could actually work.

(Correction: My wife, who is an accountant, informed me that in the above example, taxpayers would be taxed closer to a rate of 45%, rather than the stated 30%).

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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