How about Economic Stimulus which actually gets paid back?May 22nd, 2009 by Paul Tousignant (Tooz)
How about Economic Stimulus which actually gets paid back?
Increase families’ disposable income by $200 - $300 per month
What is needed: Consumers need cash, banks need money to lend
How to do it: Transfer credit card balances to future income tax refunds.
The average American has close to $10,000 in credit card debt, paying $200 to $300 in monthly payments.
Credit card debt in the US totals close to $1 trillion.
Credit card defaults are on the rise – the New York Times reported on 05.10.09 that defaults could total $80B to $180B by the end of 2010.
Consumers free up $200 to $300 per month, which will be spent to bolster the economy, and/or which will enable house or car payments to be made, or bankruptcy to be avoided.
Banks will get credit card debt paid off, providing funds for more lending and reducing customer defaults, which will boost the economy.
The Treasury will be paid back with interest, making this stimulus possible with no increase to the national debt over 6 years.
Criminally high interest rates which contribute to the number of defaults are replaced with reasonable, more affordable rates.
Consumers fill out and send a “balance transfer” form to the IRS, just like they would when switching credit card companies.
The IRS sends a check to the credit card company.
Consumers will pay 1/6 of the total plus annual interest with annual income tax refunds.
The government can charge 5% to 6% interest.
The government can make the debt immune to bankruptcy.
Require the payments back to the government to go to pay back the money borrowed for the program.
Limit the program to $100 to $200 billion in the first year, offer for the next 2-4 years.
Charge no more than 5% to 6% interest.
Start as soon as possible!