The 700 Billion to possible 2 Trillion Challenge

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krogoth's picture
krogoth
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The 700 Billion to possible 2 Trillion Challenge

The 700b to possible 2 Trillion challenge- I posted this as a reply on another thread, but I am too interested in seeing how all of you would spend it if you were in charge. This challenge goes out to Chris Martenson and Erik Townsend as well, all the staff of CM.com, and all of our multitude of backgrounds and opinions we users have here.  

OK here we go. You are Paulson, or Congress, or anyone in power in the United States controlling bailout money from 700 Billion to a possible 2 Trillion fully or more in the future. How would you allocate it? List how and why, and let's see how everyone comes up with ideas to help, solve or fail at saving the economy and the citizens of the US and the world as a result. Don't just list like GM without an explanation why. Also explain how you expect to get a return on your investment in the future or how a return will stimulate the economy, create jobs, etc.

Don't be shy, all ideas are welcome. Go for it and let's see how really good you all are at this. I will list my plan later after you all have shown me some examples of what you think to do.

 

Good Luck

 

 

 

 

 

 

 

FNKRoue's picture
FNKRoue
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Re: The 700 Billion to possible 2 Trillion Challenge

I'd probably weigh out all of the morals and good intentions I had when I pursued a political career, subtract the ones that I'd lost over the last few years and then on that consideration examine the current predicament.  From that realize that the situation created is so god awful that it is beyond one person's action's to repair, excluding actions that would be so unpopular with the uninformed masses (imposing social changes), or unpopular with the people who'd kill me to protect their quadrillions already invested in this failing system (fed and whatever lies in it's shadows).  I might just have to organize some way to ensure I and those I know would benefit most to put us in the best possible situation for survival of the coming "new world order".  A new order which will probably have a bumpy launch requiring much stick and little carrot persuasion on those less financially or politically well connected.

 

Maybe I could be so lucky as to have worked for a major financial institution like goldman Sachs, boy that would give me some great possibilities there.  But who am I fooling myself.  What are the chances of someone like Paulson having to be concerned about a massive montary policy mistake, an absence of morals, or be so lucky as to have had a major bank tie in recent history, or a general populace and capitol hill too incapabale or frightened to question any of my self interested actions..........

 

 /sarcasm off.

Investment would be my answer, tough love investment.  3 trillion smackaroos are alot of greenbacks.  And while it might be tempting to go get them changed out for tens and twenties and build an escape ladder to the moon (I think it would reach), there is alot of good that it could do.

A couple thoughts off of my less than capable to fix such a massive problem mind are:

Infrastructure rebuilding.  I'm pretty sure 3T would cover both the road/bridge issue and implement a smart grid system.  Could potentially create a nice bit of jobs for a bit while it was done too.

Buy canada? 3,000,000,000,000 / Canada — Population: 33,390,141 (July 2007 est.) =  That's like 100k bucks for every person in canada.  Then use their unexploited resources and surplus loonies.

Bail out china, buy up all their treasury offers.

Build 500 nuclear reactors and a great energy management solution like Beacon Power's Energy storage flywheels installed nationwide and a hydrogen fuel cell system for automotive.  (Last part would be off the budget of 3T, oh well)

Give everyone in america a puppy and a year's supply of food?

Offer a 1 trillion dollar reward to the first company to come up with a solid comprehensive and executable solution to the national energy situation and then spend 2 trillion implementing it.

Create a 1 billion dollar federal lottery, use a balloon annuity payout or 20% cash option.  Charge $20 a ticket, have bad odds, use the extra money generated for.. something.

massage and spa retreats.  Hey failing banks get to, why not failing governments?

A comprehensive cloning program to bring back the founding father's, genetically imbue them with old school Stallone and Arnold the Governator physical prowess and unleash them on capitol hill.

If I was to put any money in any companies it would be with huge demands and little lee-way.  someone had a great idea on requiring auto industry to produce 100mpg cars.

Yeah I guess I have no great ideas. 

krogoth's picture
krogoth
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Re: The 700 Billion to possible 2 Trillion Challenge

No dude, your ideas are cool. Everyone's opinion or ideas here are important. I like the cloning and buy Canada part.

 

 

 

 

joemanc's picture
joemanc
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Re: The 700 Billion to possible 2 Trillion Challenge

I'm not a fan of printing money, but what I would have done was to give it to the people. Perhaps on a sliding scale to incomes up to $100K, people would have gotten up to say $5K. With this, they could have(I know I would have) paid off debts. Debts that were paid off would obviously end up back in the bank. This would do 2 things: help people pay off debt and re-capitalize the banks.

Other ideas that make too much sense to do: Cut the size of our military, balance the federal budget, pay down our debts, raise interest rates, end the federal reserve.

Ben Bernanke will keep printing money until he runs out of trees - Jim Rogers

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mpelchat
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Re: The 700 Billion to possible 2 Trillion Challenge

Very interesting challenge,

1) I would not give one dime to any business unless they can produce a viable business plan with reasonable projections  that they would be healthy after the ressesion or depression was over.

2) Re-align peoples housing costs to match there income.  This could be done in many ways:

a) the new law in place is an easy method of fixing this problem, however it rewards foolish people for spending over what their income allows.

b) move people to a home they can afford, but this will be an enormous upheval and we would have many many empty larger homes that would soon go into disrepair becoming worthless or worse.

c) Let the forclosure process takes it's course, potential caos for a long while

Comment: No fun answers here.  I lean twards a) due to it would be have the least upheval.

3) Develop public works jobs.  Our infrastructure is in desperate need of repair, so lets fix it.

4) Develop jobs in renewable energy (wind, geo-thermal, etc.).  Make studies of all areas of the US, make sure all possible renewable methods are being used.

5) Develop jobs in urban areas to remove abandon buildings. This would reduce crime, infestation, make it easier for businesses to have sights to rebuild and we could reclaim materials like steel for other uses.

Comment:  3), 4) and 5) are to keep people working and rebuild.

6) While this is happening:  We need to look at restructuring our monitary system from a fiat system.

This is what I would have done.  What do you think?? 

 

lundsta's picture
lundsta
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Re: The 700 Billion to possible 2 Trillion Challenge

Make all people in power take courses in economics, sustainability, applied sciences and social sciences. If Paulson had taken my sustainability class he would have failed and been forced to pick a new major. I am not saying being educated will solve all the problems, but it always helps. I know a copy of the crash course for congress is less than 2 trillion. :)

Damnthematrix's picture
Damnthematrix
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Re: The 700 Billion to possible 2 Trillion Challenge

Roue

It's hard to know whether you did indeed turn the sarcasm off....  nukes?  Really?  And Hydrogen?  More fantasy land... go read  http://www.peakprosperity.com/forum/peak-oil-not-peak-energy

You can't spend your way out of this mess.  The debts must be canceled.  If you don't cancel the debts, the problem remain, and there's simply not enough money available to fix the debt problem.  Debt IS the problem, it's like a cancer, and it must be cut out. 

Once you get rid of debt, THEN you can start thinking about spending all this dough.

Call me back after the Jubilee..... 

krogoth's picture
krogoth
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Re: The 700 Billion to possible 2 Trillion Challenge

OK Matrix, let's not criticize anyone.

This topic is for what you would do if you were in power and had to make the decisions, so it is open to all ideas dealing with the issues we have now in front of us. Paulson looks like he is getting his hands smacked. So you are the new Treasury Secretary, or Obama, or Congress or whoever. What would you do? That's what this is for, not criticizing ideas. Once we get a lot of people to participate in this discussion, then we can talk about  the ideas presented. If your solution is the cancelling of debt, then that's your plan, so you have not spent 2 Trillion on anything or spent anything at all. After more members comment on what they would do or plans they would have for this, we can also comment on what you would do, debt forgiveness, not spending anything and the ramifications of this.

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

Damnthematrix's picture
Damnthematrix
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Re: The 700 Billion to possible 2 Trillion Challenge

OK Krogoth,

Say I managed to cancel all the debts..... I would start spending your bundle of cash on Railroads.  All electric, all powered by new renewable energy. 

Rail could probably be built in the middle of freeways where grades are mostly flat, and this would save a lot of hassles resuming properties. 

I'd put a $5 a gallon tax on gas too.  Let's face it, now nobody has debts to pay off, they can afford it, and this gives a price signal to reduce consumption... might even raise loads of cash for the new sustainable infrastructure.

I'd convert all the GM and Ford factories into wind turbine and solar concentrator manufacturing centres. Best to use all the left over resources doing something worthwhile...

I'd also implement an education regime to teach school kids Permaculture.  They'll need to know how to grow food without oil and gas in the very near term and they are after all the new kids on the block who will feed us in our old age.  This is already starting to happen in Australia you might be surprised to learn..

Oh one other thing....  why do all your posts have acres of blank space at the bottom of them? 

krogoth's picture
krogoth
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Re: The 700 Billion to possible 2 Trillion Challenge

OK now your being critical about my Whitespace. Just kidding. OK, well. I need to do my posts in Word and then paste them into CM.com because they have a bug that if you use the spellchecker too much, it will crash the website, so I guess the Whitespace is an effect of cutting and pasting. I will try to do my pasting better so your not so bothered by this.

 

As for your comment about cancelling the debt, that's not the question. The question is what would you do with CURRENT CONDITIONS we are facing. Since you are so centered on canceling the debt as a basis, I guess we will need to comment on this now since you don't get the question here.

Cancelling the debt will never, ever, in a million years, if aliens land on the planet, if Gandhi comes back with his head and the body of a Cow, or Jesus pops up in a Disco, ever ever ever happen. SO basing your ideas on cancelling the debt as a starter is not only unrealistic, it's delusional. It's not only unfair to people who have PAID debt on time, the fallout alone would cause massive problems never seen before because we have never done it, starting with rioting from people (the masses by the way) who are paying off things on time like mortgages and car payments. Debt is NEVER and I repeat NEVER forgiven. It is simply sold to someone stronger to collect from you regardless. Or you can simply not pay and be thrown out of your house. DEBT and TAXES will never go away in your or my lifetime.

SO let me state this in a way your Matrix obsessed mind can understand it. YOU ARE OBAMA, what would your do with 700 Billion to 2 Trillion dollars if it was allocated to you to spend, without debt forgiveness, taxes abolished, the Federal Reserve closed or whatever else you come up with. In other words, THE CONDITIONS WE LIVE WITH NOW, NOT THE MATRIX. Understand? Or do I need to spend more time with this? 

 

 

 

 

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Re: The 700 Billion to possible 2 Trillion Challenge

Well first I would send Chris M a billion dollars for his time creating the Crash Course then I would put the CC on television for a month at prime time in every country of the world so that everyone who has TV would have seen it. This would make some of them realize that things are going to be different from now on and that they will have to change their ways.

I don't think throwing money at the problem will do any good in the long term, might prolong the collapse for a little longer but it's going to happen anyway and it will be worse if it's prolonged. Educating people on how to survive the crisis would be something I would spend some money on, some zero interest loans to small business and agriculture. I would have to see how things turn out, get rid of govt interference in the market, a tax holiday would give people more money to eat with, allow people to use whatever they want for money and not force worthless paper on them. I don't know if you've noticed but the govt does not run things well so I would do as little as possible to interfere with the free market. How much did I spend so far 50 billion? Guess I'll give the rest back to the treasury.

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Damnthematrix
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Re: The 700 Billion to possible 2 Trillion Challenge

I don't think it matters much whether you believe debt will never be canceled Krogoth.....  Where will all the money come from to pay the hundreds of trillions due in interest over the rest of this century?

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Damnthematrix
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Re: The 700 Billion to possible 2 Trillion Challenge

I should have also said Krogoth, that when you declare bankruptcy, your debts ARE canceled......  van't get blood out of a stone hey..

Now, if the whole world is bankrupt, what are we to do?

Read this:

10/20/2007
Odious Debts Online
Lisa Peryman

The U.S. Congress is to
consider far-reaching debt-relief legislation that seeks to dissolve
the debts of 67 of the world's poorest countries owed to the United
States, other official creditors in the Paris Club, the IMF, World Bank
and other international financial institutions.

or

 

 http://taylorgreenelaw.com/bankruptcy-primer/brief-history-debt-forgiveness/

Our society has a long history of offering certain debt relief. England
enacted its first bankruptcy law in 1542, and the concept of debt
forgiveness first appeared in the Bible at Deuteronomy 15:1.

 

You might get irritated at my unwillingness to explore spending capital before forgiving debts, but there's a very good readon why I insist on this: there's no other way..... 

 

You wrote " the fallout alone would cause massive problems never seen before
because we have never done it, starting with rioting from people"

 

And you don't think this will happen anyway? 

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krogoth
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Once again explaining to Matrix

As much as I would love to talk about debt forgiveness, or bankruptcy, or whatever. You have made your opinion known. This thread is about something else, that for some reason you don't understand. Maybe its because you are in Australia or whatever. I would like to spend some time collecting peoples thoughts on what is GOING TO HAPPEN. Or what you would do if you were in control of the UNITED STATES. Who you would HELP and WHY. Or who would you NOT HELP.

I could sit here and type for days about what I would like the world to be, or the history of debt forgiveness, or bankruptcy laws in Australia and the US, but first I would like to see what people here would do in the situation we are in right now, that will also have great repercussions for Australia and the world.

I will give you an example so you understand more clearly-

This is 2 mistakes I think Obama has made already that I would have not done if I was in power. It shows when we need a strong president, we may be having one that is going through on the job training, which is not good.

1) Voting for the original 700 Bil package with Biden with no oversight whatsoever
2) Already talking about bailout funds being a must for the auto manufacturers

So, once again. I would like to know what our OTHER USERS would do if they were in this position of power, or the decision makers. Who would get help and why. How would you change things today, not yesterday etc.

 

Thanks for your cooperation

 

lundsta's picture
lundsta
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Re: The 700 Billion to possible 2 Trillion Challenge

Pierre Abelard:

The beginning of wisdom is found in doubting; by doubting we come to the question, and by seeking we may come upon the truth.

 

There is so much uncertainty around us today. I have finally figured out what I might do. First, I would try to send the message that our lifestyle before is not going to continue in the future. I would try to use every media outlet to explain we get a "redo". This is not really a bad thing. We have an opportunity here to change the American Dream. This is a gift.

The funds~

We have forgotten how to take care of ourselves. It is time we revist a simpler time. I would use the money to redo how we do our Energy, Food and Housing.

 

Energy~ invest in solar, wind and hydro energy. Help americans make the switch to use renewable energy sources. I would also invest money to continue finding new ways for energy. ( I dont know enough about all the options to elaborate) I would let the automakers fail. The auto workers would find new work in renewable energy. There would also need to be funds set aside to research replacements for fossil fuels.

Food~ I would allocate about 500 billion to Organic Farming. Maybe focus on Permaculture studies. No more feeding our children food from other countries. We have all the tools we need in our country to be completely sufficient.

Housing~ I would allocate 500 billion for "green" housing. We are wasteful. No one needs a 4000 square foot house. I would offer new housing developements (my goal would be to help those that are homeless from this mess). These new developments would be smaller 1200 squarefoot homes with renewable energy. They would be set up to allow the community to grow some of their own food as well. These communities would serve as a model for future homes.

I would also use my presidential power to freeze all government salaries. If energy, food and housing are more affordable they could live on 45k salary. I believe this would save us enormous amounts of money.

These are just general ideas I had. Thanks!

Farmer Brown's picture
Farmer Brown
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Re: The 700 Billion to possible 2 Trillion Challenge

I just caught this thread.  Sorry I'm a little late to the party, but here's what I would do.  Now, I didn't read everyone else's solutions so as to avoid clouding my judgement.  I'll read them after I post this:

First, I wouldn't spend this newly created money.  I'd destroy it.

Then, I would count up all the gold in the possession of the US government.  Supposedly, it's 260 million ounces.

Then I'd count up all the existing dollars in circulation and do the math of dividing them by the quantity of gold in existence.  I'd announce the figure to the world, the new dollar/ounce of gold figure, and then I'd use a few sticks of dynamite to blow up the dollar printing presses. (I'm speaking facetiously of course: One press would be left in existence to replace worn bills.  I'd put it in a giant glass-enclosed room in the middle of the Washington Mall for all to see, and equipped with web-connected cameras for anyone to monitor at anytime.  Bankers could line up at the door to turn in worn bills, and then get in another line to collect the new ones!) 

Comic-relief break over:  This would fix the dollar to gold once again.  Every dollar would actually be worth something.  Faith in the dollar and in the US economy (long term) would be restored.  We would be left with a multitude of problems, none of which have long-term money-creation solutions, but at least we'd have a stable currency. 

 The "Big 3" would still go under, at least two of them (by the way, when they say "Big Three" are they referring to the auto manufacturers, or the auto unions?), but somebody would buy the assets, rehire some if not most of the workers, and make profitable cars for a a change.  That's better than bailing them out for a few months and having them go under anyway. 

People who took mortgages they could not afford will still be foreclosed on, and banks that made bad loans will still go under.  But somebody will come in and buy the houses and rent them to the people that lost them, or the banks will rent directly to them.  They didn't really lose the houses by the way: you cannot "lose" something you do not own.  They lost the right to keep paying a mortgage they could not afford to begin with.  If they didn't even pay a down payment, exactly what are they "losing" - the miniscule equity one accumulates over the first few years of a 30-yr mortgage?  That's better than trying to bail out banks that are going to go under anyway, or pulling the rug out under the rule of law and making it illegal for banks to foreclose on delinquent borrowers.

We'd still be in a recession caused by cheap money and onerous regulations.  We'd still be facing baby-boomers becoming elligible for SS benefits in ever-increasing numbers.  We'd still be facing ever-increasing energy prices, and a world with finite resources.

But guess what:  none of those problems can be solved by printing money into existence.  Most of them are a result of printing money into existence.  Like a heroin addict, we have to quit cold turkey.  Yes, it will be very painful, but like a drug addict, that pain is better than the alternative.

 Cheers,

Patrick

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Farmer Brown
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Re: The 700 Billion to possible 2 Trillion Challenge

PS: (I know posting a PS or comment on your own comment is probably extremely annoying - won't do it again)

I said none of our problems have long-term money-creation solutions.  What I should have added is that they do have wealth-creation solutions in my opinion.  Wealth is not so easilly created when the medium you use to store wealth (money) is constantly being debased. 

By returning to a gold standard, our method of storing wealth would be sound.  Businesses and foreign banks would be much more likely not only to do business in the US, but also to continue to use the dollar in their business wherever it might be.  Only a fool would choose to continue doing business in, or putting their savings into, any other (fiat) currency.

This would return wealth to the US in the form of jobs, savings, investment, immigration for new jobs other than gardeners (which will help enormously in meeting our SS responsibilities) etc. 

As for the argument of deflation:  dollars could still be added to circulation.  All it takes is for more gold to be produced and deposited with the US Treasury, which would issue new (never-existed-before) dollars in exchange for it.  Of course the difference is these would be real demand-deposits, not equivalent to current day, print-whatever-you-want, whenever-you-want dollars. 

Gold would be produced whenever miners perceived the cost of drilling for it to be less than the dollars received for it.  Theoretically, this would be exactly (or as exactly as any system could get) the correct amount of new dollars an economy would need.

In my opinion, if there is a solution to our problems besides all-out collapse and possible disintegration of the US, this is it.  It may be too late for even this to work, but I believe it would have a much better chance than any argument I've seen so far, all of which call for more wealth debasement - I mean money creation.

Patrick

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