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Diffusing the Pressure

Too many Americans are living stressful lives, with no savings and thus no safety net if they hit a bump in the road. I’ve read estimates that fully 70% have savings of less than $1,000.  While it is true that certain key economic statistics have improved in the past year, too many Americans still count on food stamps for their survival and too many are not employed or have been left behind in the move to technology-driven economy. And, while consumer spending has increased of late, which has created the sense of economic health, of concern should be that credit card debt levels are at all-time highs.

This week I read, with some degree of amusement, an article in the current edition of The New Yorker that describes how some of our nation’s wealthiest have adopted survivalist strategies to protect themselves and their families in the event that our society breaks down. These people realize that the massive gulf between the haves and the have-not’s is a real problem that if not resolved could have dire consequences. The thing is, the problem is eminently solvable, and the rich hiding out in the woods with guns and ammo is not the answer, nor will it work to protect them if things do break down.

I do believe that the recent tax law change and the Trump administration’s massive reduction in regulatory red tape both represent significant steps in the right direction to create the economic vibrancy that will continue to bring a better reality for more Americans. Yet, I fear that this will not be enough to solve for the aforementioned problems. That is why I think that the idea of a monthly government stipend sent to everyone whose income level is below a certain level makes great sense and will do wonders to diffuse the pressure faced by those at the bottom end of the economic totem pole, which if left unaddressed does truly threaten our society. As a devotee of the philosophy that incentives drive behavior, I would couple this plan with an incentive in the form of increased payments for those who are married and who remain married, understanding that families with intact parents make for a healthier society on many levels. Perhaps if $X was the monthly payment for every individual in that income category, perhaps the payment for a married couple would be $2.5X rather than $2X, and would increase to $3X for those married for longer than five years. Importantly, no additional payments should be made to families based upon the number of children they had, thus reversing a terrible incentive that has been in place for years.

If you’re wondering how these payments would be paid for given our already historically high national debt, the answer is newly printed money from the Fed.  Money printing is a perfect wealth tax, as it dilutes the value of all outstanding money proportionately, thus penalizing all wealth in the fairest way. And, perhaps best of all, it can be accomplished quickly, with no lobbying and without any vote of Congress. For those of you who might say that this is not within the Fed’s charter, I say that we live in unprecedented times, and all rules can and must be modified in the best interest of our nation.

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