Why the Stimulus Programs Failed

Money is a product of the Government that is used by people and business to trade for products and services.

The problem with the Fed’s and Government’s Stimulus plans was that they did not have a good system of distributing their product in order to get it into the hands of the people who would spend it and thus create the need for more products and services.

The money was first distributed to banks with the intent of having them loan the money to people and businesses with the hope that the money would eventually circulate throughout the economy and everyone would get some, but because the banks were being highly regulated and were afraid to loan the money to people with questionable credit, the banks only loaned the money to big businesses and people that already had plenty of money. This caused two unfavorable results. Big business borrowed the money and instead of expanding their business, since business was slow, they just bought back stock in their own companies or other companies, and this caused a shortage of stock, which caused the stock market to go up much higher than it should have been, since the increases were not really based on the growth of business. Also when the banks couldn’t find enough people they could loan money to, they just used the money to buy US Treasuries. This just caused interest rates to be abnormally low so that people could not make a decent rate of return on their savings. This actually took money away from savers.

Therefore the plan actually caused the average person to have no income growth, and moreover they could not spend money to help the economy.

Before the money was even created, there should have been a better plan to distribute the money so that the average guy on the street got the money so that they would have spent it and created an explosion in business that would have created more jobs.

If Government had instituted a plan that would have created more income for working people while keeping cost for business low so that US businesses would be more competitive in the world, the explosions in the economy would have been amazing.

8-step plan that would have fixed the economy

Before you decide anything I say is crazy, read all 8 steps.

1. Reduce the minimum wage to $5.00 per hour.
2. Institute a wage subsidy of up to $5.00 per hour to any employees that makes less than $10.00 per hour.
3. The Government pays these people with a monthly check subsidy from the treasury as long as they work.
4. All employees must apply for the subsidy with a form supplied by their employer and verified by their employer.
5. People that quit work will only be paid $160.00 unemployment income for 6 months so that they have incentive to find work as soon as possible.
6. People on welfare must be evaluated every 90 days for “ability to work” by personally reporting to evaluation clinics. All welfare recipients will be required to have a drug analysis every time they report.  This would create additional jobs.
7. If someone is not able to go to a clinic, they must have someone appointed to assist them to the clinic. The people appointed to assist them will be people that are on welfare and have been judged “able to work” by the clinic and will be paid to do this job. This would create additional jobs.
8. Only people over 62 or are totally disabled will be drawing social security.

The above plan will put billions of dollars into the hands of the average guy on the street and create more jobs, a stronger economy, cause more taxes to be collected by the Government, and make US companies more competitive in the world.