Scott Adams of Dilbert fame makes an interesting suggestion at his blog. What if the rich were given an option to, say, buy homes with bad mortgages and required to rent them out? It would sort of be a tax but it would offer the rich the hope of a return, taking some of the sting out of "paying" extra taxes.
But what if investors had more options than a simple government bond? We have 37 kinds of ketchup but only one kind of federal bond? Why not a bond that finances alternative energy and another that finances war and another that finances transportation infrastructure? It would be even better if the bonds not only paid the traditional interest rate but offered a premium based on the performance of what they financed.
For example, let's say that there was a bond for community college programs to train trades people for plumbing, electrical, and carpentry work. If graduates from the program were employed in the trades at a rate of 85% or higher (to pick a number out of the air), you would get a premium of 1% on your annual return. If the rate of successful placement were 96%, you would get a 4% premium. The more promising you thought the program, the more likely you'd be to invest.
This would put markets to work as a means to finance government programs, letting investors "vote" on programs they felt would yield better returns, would create more value for the community.
And once that is in place, I see no reason why we couldn't go further with this, allowing taxpayers to indicate, when filing taxes, where they would like their money to go. I suspect that the Pentagon would get less and the National Science Foundation or National Institute of Health would get more. And I suspect that future generations, who would benefit from this research and investment, would thank us.
5 comments:
It does seem like there are a lot of other options that aren't being considered.
There is only one option on the table, the bailout, and all that's being debated is the bells and whistles that go along with it. We've got George Dubya on the sideline screaming "Pass it! Pass it! Pass it! Now! Now! Now!" but maybe they'd be better of taking a week or two and putting a little more thought into it.
I'm thinking the government should just trade incompetencies with the banking industries: the government take on their bad debt, Wall Street takes over the occupation of Iraq. It's lose-lose, of course, but the important thing is that we act quickly and decisively.
That's a great idea. Job Corps (federal program) used to do that when corporate interests didn't have a cadre of lawyers lobbying for lower taxes and another cadre of lawyers figuring out how to NOT pay those lowered taxes by moving outside the country.
I hate competing for pithy with Thomas.
That out of the way, I heard a bit of a news piece today while driving. Just who is going to run this government bail out? Government functionaries? Do we hire the Wall Street and Bank people that (&^%$& it up in the first place to administer it?
Making the huge assumption that the bail out is the right thing to do, I'm thinking we will screw it up anyway.
Another thing, the bailout does nothing for construction loans. All those subdivisions you see clear cut with some sewer stubs will still sit there and revert to the local banks that funded the project. Probably a good thing; but, the next crisis, or maybe the one after next, will be those banks going under.
Why not let us not only determine where our tax money goes, but also allow us to choose how much to pay??;-)
Technology is mature enough to enable allow the US to operate as a true democracy, instead of as a representative republic. We could also determine the weight of a persons vote by how much they are willing to allow themselves to be taxed after subtracting the amount of government assistance that they get.
Wouldn't it be nice to get rid of all of those government fat cats in their limos and private planes, that are constantly expressing how they are fighting for us poor? Especially while they are giving their friends "Raines, Johnson, Gorelick", positions to loot the piggy bank and have us tax payers foot the bill. When are we going to learn that the Democrat's words say one thing, help the poor and middle class, but their policies kill us by driving business off shore, raise energy prices, kill our environment, and take our hard earned dollars for their opulent lifestyles.
Oh well, Ron, I would just settle for having some input on where our tax dollars are spent as you suggest, all of mine is going to the pentagon, the true inventors of the Internet;-). Actually, if you notice, we do have some say, for example, enough people have expressed concern about the wall street bailout, that it being reviewed and morphed into something more practical.
Thomas,
why is it I find this so appealing? The idea of troops invading Wall Street and bankers with brief cases parachuting into Iraq seems to solve anything.
Nunya,
I did not know that about the Job Corps and how it was financed. Interesting.
Dave,
I hear ya (about following Thomas). Who is going to run this? Well, Paulson used to be a CEO of those big companies. He is hurting. This crisis has reduced his net worth from over $800 million to about $500 million.
Tim,
I completely agree (!!) that we should look at exploiting technology to allow more nuanced voting - on issue by issue or budget by budget rather than just representatives.
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