Mark Hamilton’s Hypothetical Proposal for an Economic Relief Plan

By no means am I an economic major or am I a political science enthusiast, and I say this

with a keen understanding for readers need to be assured by specialists and professionals
in their fields. I’ve just rationalized the conceptualization of our economic crises and
drawn up a proposal bailout relief plan based on the simplicity of our crises. Through my
knowledge and understanding of the crises and what brought us to economic recession,
I’ve proposed some hypothetical solutions that in a theoretical world would definitely
work. I am not writing this proposal to raise a debate as to whether it would work or not
but for readers to view my proposal pin point the flaws which would hopefully challenge
them to come up with their own solutions.

There should be an imposed National minimum wage, regardless of the state in which
you reside. (Which would obviously make some states more favorable than others to
reside in but it’s not like that is not already the case with certain states such as Oregon
and Delaware not imposing state sales taxes).

As an incentive for employers, there should be an employee tax cut. Reducing the taxes
employers pay to employ. This idea has caused great debate amongst my own peers
leading me to believe that if amongst a few people this idea is such a big issue then it
possibly would not go over easy with the general public, but in my defense I believe it
would work.

Reduction on oil prices, it’s a fact that within the last couple of months the price per
gallon on oil has dropped but as the American public we have not benefited from this at
all. Reducing the cost of oil would also entail reduction in the cost of our utilities such as
gas, transportation of freight and other areas that would widely contribute to an economic
reawaking.

We obviously know that with the high foreclosure rate in America that the demands on
rent would increase so knowing people have to live somewhere, there should be an
imposed relief on one of our most fundamental expenses which is rent. The relief should
come as rent control or at least some sore of subsidized rent reduction, if not only for a
short period of time.

Increase in social security benefits would render more money out into the market. In turn
this would increase the demand for goods, which would trigger the multiplier effect, in
the way where you would create new job opportunities.

Everyone earning less than $150,000 annually would receive free healthcare or at least
some type of subsidized healthcare.

Social Security benefits, according to the Actuary at the rate we are going social security
will not be able to pay full benefits by the year 2040, Proposed solution reduce the cost of
living by ½% Curb benefits for those earning more than $20,000 a year.
Through analysis and observation I have created some scenario’s that may have
prevented the financial recession we are experiencing today. The housing market crash
was just one factor to our economic fallout. It is not that people began to earn any less
that they had when they purchased their homes, to the contrary they earned the same but
everything else inflated. When signing these adjustable rate mortgages I assume that
most believed that if not at least they would be making more money in five to seven years
that the market would still be sufficient enough to justify selling their home. Well with a
3% annual inflation rate for the last five years and no wage increase you start to see
where the problem maximized. I suspect that hypothetically if on an annual basis wages
would have increased at least 3.5% and inflation would have only factored in at 1.2% the
adjustable mortgages would not have been such a mass problem because for the five to
seven years of earning you would have been in a position where you would have been
able to have money to invest and save and by the seventh year you would have increased
your earnings by almost 25%.

Needless to say half of American households live on less than $48,200 a year, the median
household income figure for 2006, according to the U.S Census Bureau. Even still with
the lack of wage increase US productivity soared during second quarter while labor cost
fell, reflecting mix of employment declines and export generated economic growth.
Twenty –two percent of U.S. respondents in an ACNielsen study of consumers worldwide
said they had no spare cash left after paying for basic expenses. That compares to 17% of
consumers in Great Britain and 15% in South Korea and Germany.
Payroll jobs showed loss of 80,000 jobs in August, unemployment rate soared to 6.1%
from 5.7%. Even still US workers are increasingly efficient and productive workers
become more productive producing more goods and/or services without working extra
hours means we are creating a larger economic pie that benefits the whole economy.
Some 9.8% of the population lives below the federal poverty line, according to the
Census Bureau (That line varies by household size and composition: for a family of three
with a minor child, the income limit would be $16,079.) Wages for American worker has
declined 2% since 2003 after factoring in inflation.
About 47 million, or 15.8%, have no health insurance; the Census Bureau reports and
medical bills are a factor in half of all consumer bankruptcies, according to research by
Harvard University professor Elizabeth Warren. Those who do have insurance often pay
a big price: two of five adults who bought health insurance on their own spent more than
10% of their incomes on premiums and family out-of-pocket medical expense, according
to the Commonwealth fund, which describes itself as a private nonpartisan foundation
that supports independent research on health and social issues. When an employer
provided the coverage, one of four of those insured spent more than 10%.

Mark Hamilton
©2008 Supreme Ventures Inc