Feb 26 2009
Recently Asked Questions
These questions were asked in the popular forum Daily KOS
This plan is talking about funding the stimulus through bonds. They are just using different words.
Neal: The common thread (I was about to say bond!) between Bank CDs and Corporate or Municipal Bonds is that they are both classified as Debt Instruments. I am not sure why the semantics are the primary focus.
1. If the concepts work, then call them whatever you wan I would suggest “These Work Instruments”!
2. Your comment seems to hide a latent dislike for Bonds. Used appropriately, Bonds are a necessary funding mechanism in any healthy economy.
Please help me understand your comment further if this does not address your issues.
How about if the United States top 1000 billionaires and Corps gave a billion dollars a piece?
Neal: They will, they’ll sort of have to - or pay a lot more in annual taxes. If you strip away the “tax preferences” of capital gains and oil depletion allowances — the rich will have a clear choice under the FUND AMERICA plan proposed by The prosperity Mandate:
Pay the full tax rate OR get a 10% yax credit and tax free interest on a FundAmerica CD pledged for a loan to create jobs. Pretty simple choice if you have a lot fo money sitting around looking for an investment.
At the time of first writing TPM the grand total of Net Worth in the U.S. was approximately $140 Trillion - so I was asking and giving incentive to the rich for 1% of their total holdings. With the fall of the financial markets and drop in Net Worths this has leaped to 1.5% to 2% - still very doable.
I don’t think we have a full thousand of them. Around Y2K the richest Forbes 400 weren’t all billionaires yet. I seem to recall that threshhold being passed only a few years ago. It may be that with stocks dropping by half, we’re back to 400 richest individuals being all billionaires. But I’d sure be interested to know what the number is. Bill Gates Sr. was arguing on Seattle public radio early in the Bush admin for a big one-time Wealth Recapture Tax at the top end. So you’re in good company.
Neal: I agree, I would like to have that data available as well.
The Obama campaign proved the incredible strength in motivating a vast number of samller players. TPM provides for this by lowering the threshold to participate in TPM FundAmerica CD to as low as $500 as part of a Master Limited Partnerhsip.
MLP will syndicate public subsrciptions to participate pro rata to
buy CDs -
gets a 10% tax credit -
earn interest tax free -
and most important of all - can specifically designate the program(s) each MPL will support.
All of the tax benefits flow 100% to small investor and the entire management fee (realistic by any standard except the recent Wall Street greed) would be 25 basis points or 1/4 of 1% or
0.0025 of gross income. On the level of large volume we are talking about this would be very profitable to the MLP syndicators.
Mitt Romney as a managing director is a non-starter. That guy is a fraud.
Neal: Regarding Mitt Romeny or any other nominee to the Board of Advisors. The Leadership section is presented as an example and road map to the diversity of talents, political biases, and expertise that will be required. I have received simiilar comments on just about every single person proposed. I think that means the intention is working. Ultimately, the Board of Advisors will have to be approved by appointed or approved as they will have a lot of power and responsibilty to oversee the entire TPM system.
Unfortunately, this is unworkable and relies upon voluntary payments to the program. To say that it isn’t based upon debt is inaccurate. It’s just another form of debt through donation. The impact on current growth would be problematic IF $1 trillion came from people’s current income.
Neal: The concept is to move away from direct government funding and into ‘conventional’ Bank originating lending with the responisbility and platform to ‘PayBack’ the conventional lending built in.
The President and everyone I can find on the internet seems to agree with one single imperative — we ahve to get the Banks lending money again - credit needs to flow. TPM and the FundAmerica Program makes that happen without $1 of direct governemnt funding.
The vast majority of the funding for this will come, not “from people’s current income” but rather from existing cash and net worth sitting idly on the sidelines. Look at the balance sheets of successful corporations — there are HUGE amounts of Cash and Cash Equivalents.
The only direct use of current income occurs for people making less than $50,000 annual income. The proposal is that they are given the OPTION of paying the existing tax or depositing an equal amount into their own named savings account - which would have certain use restrictions.
This group of people would have the further CHOICE of investing their new savings (equal to the amount of taxes they would have paid) into a Fund America MLP. If they do not need the Tax Credit - they could sell it for cash. This is a serious multiplier in SAVINGS for our lowest income earners and a vast majority of tax payers in America.
Thank yo for your comment, let me know your reactions to this reply.
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And please leave other tough or easy questions about the program below. And if you can think of a good way to improve on this, we are listening and have modified the program a couple times already due to reader feedback.
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