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Another stimulus?
Give money out based on Social Security credits
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We are now hearing from Washington and the media of the possibility of a future stimulus package.
Since it’s debatable whether the first at $3.27 trillion worked, considering the unemployment figures and other indicators, I’m rather leery of another. It appears only banks and Wall Street would get richer and it would offer little for working people or people out of work.
The first stimulus was, as they say, designed to give liquidity to struggling banks, in turn allowing them to begin lending again. Of course there were no mechanisms in place to force them to lend again. With growing concern over federal influence in the private sector, it would be difficult to implement anything that would coerce the banks to lend directly to the people.
The people can be broken down into simple figures. There are about 320 million in the U.S., minus120 million for children and those who just work sporadically or never have worked. Also, take away 20 million undocumented workers who don’t pay into social security. This brings us an approximate figure of 180 million American workers and retirees.
These are the individuals that deserve relief – not Wall Street or big banks.
A stimulus plan that provided direct relief to the aforementioned 180 million, based on earned Social Security credits, would solve the reluctant bank issue. It would put money directly in the pockets of consumers and small business owners.
Every tax payer receives a yearly statement from the Social Security Administration ( letting us know how many credits we have earned over the course of our lives. A person 20 years of age may have one to four credits. Someone 21 to 27 years of age should have about 10 to 20 credits. At 30 to 39, one should have 25 to 40 credits, etc.
Give $500 tax free per Social Security credit to each of the 180 million working and retired Americans. A working class married couple could receive $40,000. A 25-year-old might come into $5,000..
This wouldn’t be the $200 or $300 “Gerald Ford Refund” we received in the '70s or the more recent “rebate check” of a few years back. We all need more than a cell phone payment this time. The above mentioned married couple would likely catch up on bills that have compiled a considerable amount of interest, or perhaps a delinquent mortgage, or purchase a new home altogether. This could eventually solve the housing crisis.
People who don’t find themselves in such dire straights might boost the consumer market by purchasing TVs, washers and dryers, or maybe a car, or maybe something as simple as eating out more often. This would put money into the business place, which in turn could influence job growth and hiring.
The price tag of this particular plan would be in the $2 trillion range, but a majority of this would be paid back with revolving taxes on merchandise. For instance, a lumber company buys rough sawed lumber. The lumber is taxed, they mill it and finally sell it to a wholesale distributor. The distributor pays taxes on it and then sells it to a retailer. The retailer is taxed, and sells it to a builder and the taxes are paid once more. The same principle applies to appliances, automobile or any other sellable merchandise. Also worth considering is the income taxes of new employees created by monies injected into society.
I never agreed with the first bailout of insurance companies, Wall Street or banks. I’m not in favor of another stimulus. But if there is to be one, it should be put into the hands of those of us who have actually earned it.

Parfitt is a Richmond Hill resident and local builder

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