Wednesday, March 4, 2009

Zombie Economics... Part 2: "Stocks Hung By The Chimney With Care"

I pay taxes. Admittedly, I don't pay that much because I don't make very much but it is money I could really use. On the other hand, I know myself well enough to know I would still spend it all. I live paycheck to paycheck and honestly can't spare any for savings or investments (or any that would amount to much).

So I am ok with forced payments into Social Security and MediCare because those are programs that (supposedly) I will benefit from eventually. What I am not ok with though, is that with Social Security I am just getting back what I paid in (perhaps a little more if I live beyond my allotment) or I may end up with less than I paid in...perhaps none of it.

What a Lousy investment. Maybe that's what I get for relying on government for my retirement but you'd think that a $100,000 (or more) over 50 years would make a bundle if invested wisely. The problem with Social Security is that our money is not invested in anything (it's mostly just borrowed from constantly).

Arguably, the best thing to invest money in is money...or rather lending it.

Well our banks and lenders seem to have fallen on hard times (mostly due to unwise investments) and need some money to lend some money to make some money. I for one would gladly invest my future Social Security payments (and maybe some of the existing) into a government regulated but privately run lending institution...a Semi-Nationalist Bank.

No, I don't want to Nationalize all banks. but the money invested by We The People would be under strict rules about investments...small business loans, tuition loans, even home loans but only if they can afford the (low) payments. (If they can't then sorry, buy a cheaper house, rent or get a better job.)

The Government (through Social Security) would buy stocks for 50 Cents on the Dollar, basically getting 2-for-one stocks, one of which belongs to the Feds and the other belongs to the individual. The Feds however cannot hold more than 49% stock in the bank and must sell back to private investors anything over that. The Bank would still be run by a private board of directors but with strict regulations.

We the taxpayers can let our stocks sit, buy more and even sell to other private investors but at Retirement age can either cash out completely or take a portion and leave some as investments.
The government must hold it's stocks no matter what the market does but hopefully is making money off of dividends (as our accounts do) to maintain operations and cover losses.

Private Banks and Lenders would still exist and compete with the Federal Bank for loans and private investors but the Federal Bank would mostly offer long term/slow growth investments that are guaranteed.

I know most folks don't like the idea of Nationalism and neither do I for the most part but maybe this could be a compromise that would benefit taxpayers, Social Security and Banking while leaving a smaller Federal Footprint and costing less money to fund (the money is already taken out of our paychecks anyway).

I would love to own some stocks and the banks need help. If I have a genuine stake in the success of a Federal Bank, than I would be willing to pay for it.

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