How to stimulate the right part of the economy by saving the government money

With all the fuss about the Fed raising interest rates- which is going to go straight to the banks’ bottom line, it’s time to take a look at a commonsense approach to handing some money back to the people at the bottom of the economic ladder- and save the government money at the same time:

A new report shows the cost to produce a penny was 1.7 cents in the 2014 fiscal year. That’s down from 2.4 cents in 2011 but still more than face value.

And that won’t change.

“There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value,” the biennial report to Congress said.

The nickel, too, is dead weight for taxpayers. Production costs stood at 8 cents last year, down from 11 cents. The lower cost per coin is largely a result of rising production and reduced metal costs.

Other coins turn a profit. A dime costs 3.9 cents to make, and a quarter 9 cents. All together, the Mint made $289.1 million on seigniorage–the difference between the value of the coin and the cost to make it–despite a $90.5 million drag from the penny and nickel.

Congress in 2010 told the Mint to examine ways to save money on coin production, a mandate that so far has led to detailed testing of alternative metals and production methods, including the use of a laser to produce coin blanks.

The Mint estimates that switching up the metallic content of coins could save taxpayers $5 million to $57 million a year, though vending, amusement, laundry and other groups with coin-operated machines warn that it could cost them billions to reconfigure machinery and make other adjustments needed to accept altered specie, the Mint said.

Source: Just How Much Does It Cost to Make a Penny?

So, how do we do this? You know that pile of pennies you have, sitting around the house? In kids piggy banks, and on top of the washing machine? Buy them back at more than a penny.

Have a day set where you can bring in 100 pennies and get a dollar bill and a dime back. Making the effective cost of putting a penny back into the Fed’s coffers .0011 cent. You could even spiff people who brought in 1,000 pennies and give them back $11.25 etc.

If the cost to make the nickel is that high and the Mint needs more- simple, buy them back too.

Since the super rich probably won’t waste the time running their spare change to the banks for the buyback- this will put a bunch of extra dollars into the hands of those who’ve been penny pinchers for a good reason. Pay the banks a small premium for handling the cash, but stop the stupidity of minting new coins that cost so much. Economic stimulus made easy.

Dr. Yellen are you listening?

Thoughts?

 

Let’s put a face on unemployment

The latest news is that pouring money into road construction as “stimulus” didn’t work the way it was supposed to. Of course, when at least 10% of the workforce is unemployed, it’s not a matter of buying your way out of the situation. We need systemic change, and we need it fast. It’s time to stop bailing out the millionaires who pay for election campaigns, and start looking at putting in place ratios that limit pay against how many employees you have- and what they’re paid.

Why? Because if they can’t find jobs- and unemployment runs out, we’ll have a big segment of our population ready to turn to crime to survive.

Hopefully- it won’t come to that.

But, to make it relevant- in a personal way- I’d like to introduce you to my friend Justin the goalie. He doesn’t have a degree, but has worked in hospitality, retail, light manufacturing and administration. He was working for a retail chain called InkStop until last October, when they suddenly closed up shop and stiffed all their employees:

WARRENSVILLE HEIGHTS, Ohio — InkStop Inc., a specialty retailer of ink, toner, consumer electronics and other supplies for small businesses and home offices, abruptly told its employees that it was shuttering all 152 stores nationwide as of Friday and laying off all workers until further notice.

via InkStop abruptly closes all 152 retail stores and lays off all workers | Business – cleveland.com – cleveland.com.

Since then, he’s been applying like crazy. No luck.

We sat down today and had a brief talk about how hard working and willing to work people who can’t find work these days.

Justin needs a job. If you would like to hire him, here’s his resume PDF: Justin Sharpe Resume

Thanks.

President Obama!

It hasn’t sunk all the way in yet. Maybe by morning, I’ll feel like the dark ages of 8 years of a moron in charge are finally over. Maybe, we could even see Congress impeach Bush, and get started early.

When you have Mike Turner telling people he’s endorsed by Obama, even stranger things can happen.

While I have little respect for how John McCain ran his campaign, I was impressed with the class he showed in his concession speech. When I watched Obama speak, I felt as if I was watching a speech that will go down in history. The job that he faces, the obstacles to overcome, the challenges ahead are monumental and our country is still divided.

52% of the vote counted.

With 52% of the votes counted, the country still has a red stripe dividing our nation.

It would have been divided no matter how the election turned out, looking at the maps – and the first objective is to work hard to put the campaign rhetoric behind us, and to silence the hate mongers who’ve incited fear for a living. The people have spoken, and it’s time people like Hannity, Bortz and Limbaugh either step out from behind the microphones and run for office, or shut-up, because we’ve got to work together like never before if we don’t want to end up a third world country.

Change is hard. The first thing we need to look at changing is the way we elect our politicians. We can’t keep spending 2 years and billions of dollars on sound bites, while we’ve got to create an economy with opportunity for all. It’s not about Red or Blue- it’s about Red White and Blue, and how can we stop worrying about us as individuals, and start working on us as a nation.

A client called me today, a woman of means. She was worried about what would happen to her business if Obama won. She knew it was wrong to think about herself, but, it’s natural. Now that he has won, and we’ve put this election and its mudslinging behind us, it’s time to remember, we make this country great- not our leader. It’s up to all of us to roll up our sleeves, work together, and try to watch out for our neighbors as we would want them to watch over us.

Think back to how we felt as Americans on September 12, 2001. This time, realize, we’re still the same nation, yet, we’re going to try a different approach. An approach that focuses on we, not I. An approach that realizes we’re part of something much bigger than what’s in it for me. It will be our attitude that will determine our altitude, and the controls are in our hands.

Be thankful of what has survived the last eight years of misguided “leadership.” We’ve seen the definition of inept redefined over and over, from the squandering of global goodwill after 9/11, to the botched response to Katrina to our current financial crisis where the compassion has been directed at the wealthy, while the worker gets the shaft.

It seems to me that our economy could be something we could all make an effort to jump start, without government intervention. After all, if $300 checks were a feasible solution from the government- why can’t we do it on our own?

President Obama was elected with an average donation of less than $100. His support came from the disenfranchised, the working class, the overlooked. If we all took $100 and spent it by Friday on something from within our own community, we could send a message that yes, we believe that times are changing, and we see a bright future with our new president elect. We could send a message that we’re going to do our part to say we’re confident with our choice. Maybe, Wall Street would take notice. I’d almost say we should all buy stock in Ford and GM, but, the problem is the CEOs still don’t think about the big picture, just themselves.

We also need to shut off the hate. Take stock in the numbers that voted, take a look at the message. Change will only come once we know that there is a power in we, and it starts with me. Redress those who spew hate, fear and negativity, because today is the first day of a new nation.

It’s late. I need to let this all soak in.

Yes, we can.

Can you think of other things we could do?

My question for the presidential debate tonight

Tonight, the questions are supposed to be from the people.

Not, that it means that John McCain or Barack Obama will actually directly answer any question clearly.

I’d like to hear a simple yes or no answer to the following question, with a promise if elected, to change the credit card rate cap lower:

Senators, it was just this January that the government pushed a $150 billion economic stimulus package that sent check to Americans to stimulate growth, which obviously, didn’t work. Now, we’ve committed $700 billion more, yet, as much money as the government pumps into the banking system, at low interest rates- the banks don’t pass the savings on to consumers through lower credit card rates.

When people get behind on their mortgage, they often turn to credit cards- and then get caught with penalties and interest rates that can be as high as 29%. Would you support forcing banks that ask for assistance at the Fed’s discount window to cap their interest rates at 19% and replace penalties for over the limit charges with a forced reduction in the consumers credit line, as a way to offer relief to the people on Main Street?

What would you ask?

How I’m going to spend my $300 – or “we messed up, and need to buy your vote “

I’m a service disabled veteran. Instead of ending a war that’s bankrupting our country, and making even more service disabled veterans, Congress, just voted to hawk your future to send a paltry $300 to 250,000 service disabled veterans.

Anyone in congress who voted for this, should be voted out.

NPR: Senate Adds Aged, Vets to Stimulus Bill
“If today (Republicans) are squirming because they voted ‘no,’ that’s what democracy is all about,” said New York Sen. Charles Schumer, the head of the Senate Democratic campaign committee. “The political chips will fall where they may.”

But Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, said: “Discretion is the better part of valor. The best thing for us to do is declare a big victory that we’ve achieved, namely getting the rebate checks to 20 million seniors and 250,000 disabled veterans.”

The measure moved through Congress with remarkable speed amid a series of deflating economic reports. Some Republicans, however, expressed reservations that the rebate checks would help much. Other lawmakers worried about expanding the budget deficit.

“We have to remember that every dollar being spent on the stimulus package is being borrowed from our children. And our children’s children,” said Sen. Judd Gregg, R-N.H., who voted against the bill.

This is an attempt to buy votes, made by people who owe too many favors to do the right things (which I’ve talked about before):

  • Cap credit card interest at 15% over prime
  • Force reset all ARM’s when the Fed made emergency rate cuts
  • End extravagant CEO pay unless they own the company (end stock option deals unless provided to all employees)
  • Return Wall Street to sanity, ending the casino atmosphere
  • Pass tough criminal penalties with mandatory jail time for individuals who cook corporate books (Enron, Countrywide etc).

So, how will I spend my $300- probably paying for the jump in property taxes on my devaluated  real estate, thanks to the Fed’s reactionary prime rate cuts which just benefit the banks and the big companies that have access to prime rate loans- not those of us who could really use help with credit card and home loan debt.

Want to help Service Disabled Veterans- stop making more of them. Bring our troops home.