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Behind the 'We Deserve It Dividend' hoopla

Posted Sep 25 2008, 02:47 PM by Karen Datko
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The Internet is afire with a grand proposal. Instead of bailing out AIG to the tune of $85 billion, why not divide the money among all 200 million or so U.S. adults?

That gives $425,000 to every woman and man, the widely circulated e-mail says, or $297,500 after taxes. Wow.

This idea has gotten a lot of traction online, particularly as Congress is now considering a $700 billion bailout or rescue or whatever for America's financial institutions.

"Sounds like a plan," exclaimed Cathy at Cathy's Blog -- For Me For Once, one of many bloggers who've passed the $85 billion "We Deserve It Dividend" proposal on.

There's only one small problem with this plan.

"It only works out to $425 per person," an anonymous reader of Cathy's Blog wrote. "Whoever is circulating that idea is an idiot. Don't believe everything you read." And how.

But the WDID plan -- claimed by so many people as their own that it's impossible for us to know who hatched it (and forgot to double check the math) -- does suggest good uses for a huge chunk of cash if it were to fall into consumers' hands -- like paying off personal debt, spending it for college and investing it.

In fact, a Forbes.com article at MSN Money spells out other possible uses for the $700 billion contained in the latest bailout proposal:

    • The nation's bridges need $180 billion in repairs.

    • Rail infrastructure needs $185 billion in maintenance.

    • $150 billion would provide every American with private health insurance, and also pay for a universal automated health-information system.

    • The government could pay off the $500 billion cost of the war in Iraq. "Unlike investments in distressed assets, paying for the Iraq war won't produce a return, but $700 billion would stem the government's future debt obligations to its creditors," the article says.

    The author of the original WDID e-mail also tapped into people's unhappiness with bailouts like the ones for AIG (actually a federal loan), Fannie Mae and Freddie Mac, and the $700 billion granddaddy of all deals being negotiated as we write. One of the things people wonder is how we're all going to pay for it.

    "Yes, he did his math wrong. It actually works out to $425 per person," wrote "spectral44." "Better than the stick in the eye we're about to get, eh?"

    Comments

     

    Nathan, when you say 'which is now laughably being referred to as "hard-working American just trying to put food on the table"'  It's not so laughable.  My income is dead average, I don't spend on extras AT ALL, and even with that, I can no longer afford to drive to work every day.  So I've started taking the bus, and guess what that's brought my grocery budget up to for me and my son?  $120 for 15 - 16 days.  Try cooking healthy meals for two on that, and you'll see that it's not so laughable.  The month I had an emergency necessary car repair?  The food budget went down to $21 and change for those 15 - 16 days.  I blame that on the overly-inflated housing market that, even though it was cheaper to buy than rent at the time I bought, still cost me half my income a month and the value of the property today is less than what I owe.  I blame that on unnecessarily inflated gas prices that take more and more of my budget.  I blame the bad economy for not getting a raise last year or this year, despite stellar reviews.  I followed all the rules, and here I am in the corner; I, and tens of millions of Americans.  It's not laughable -- it's very, very real, and very, very scary.  I'm one small disaster away from homelessness, and half the population of the US makes less than I do -- where does that put them?

    When considering the cost you need to consider what assets are being bought.  We have debt and we have assets.  Chances are the USA will make a tidy profit from this plan.  Mr. Paulson is a intelligent man who knows how to make money.  He is a money maker not a money spender.  This plan should be called "helping those who loaned money to homebuyers who turned out to be deadbeats".  After all the source of the problem is deadbeat homebuyers.  On the "Health Care" comment the actual term is "Health Insurance" needed by the children of again, deadbeats.  Health care is always availble.  Health Insurance is expensive so get a second job and give up your cable tv, cigarettes and People Magazines.  If you have children and care for them get them medical insurance.  Do what ever you have to do to get it.  Perhaps apply at the City, State, or Federal level jobs, they all have medical insurance.

    My home was foreclosed in April, 2008 where is my bail out?  Only in America.

    does anyone know how many people filled tax returns in the USA last year?  I would like to know that # and divide it by $700B.  People that don't pay taxes shouldn't get rebates or any money from the governement.  They are already getting to use roads, schools, infastructure, etc at the expense of the US taxpayer.  If you don't chip in you shouldn't get get all the same privaleges as the rest of us paying for it.

    Also, why can't we start to shrink the government?  So many people getting paid well with free health bennifits to do nothing in 2-4 yrs.  I am 30yrs old and the government that I have seen growing up and reading about in history seems to not change with the times.  Everyone keeps talking about Palin not having any experiance?  What experiance is that, milking the american taxpayer?  At least she will get in there and get rid of some uneeded spending......

    I look at it his way... There is a thousand foot tower (the Banking Industry) that is teetering on the brink of collapse. With the potential to destroy everything it falls on (US, our economy). The cost of shoring it up to prevent that collapse is 700B... The ONLY things to decide at this point is how to prevent the recurrence of a "teetering tower" again, after this one is protected? And how to recoup the $$$ spent from the persons responsible for taking massive chunks of the foundation away in the first place? And what do we do to punish those who profited from those chunks of the foundation? Pass the buy out and handcuff the offenders.

    JR

    I think we Americans have allowed this to happen to ourselves. Nobody wants to really work anymore. People move here from ohter countries and work their buts off they way early Americans did. And how many big businesses are owned by other countries? America has sold itself out! I love my country. It's time to take America back! We need a leader who is ready for that!

    When you divide $85,000,000,000 ($85 Billion) by 200,000,000 (200 Million) the result is $425. I believe the initial ammount suggested by the Government was $700,000,000,000 ($700 Billion). Using this number for the 200 million adults would yield $3,500.

    The whole bailout idea is ridiculous... why not give it to the people who need it most? I myself have been struggling the past few years with debt, unemployment and constant moving around all while trying to keep food on the table and clothes on my son's back. $425 would help out so much. That would pay half my rent, or buy groceries for a whole month. Yeah, I realize that if AIG were to fail so would a lot of people's insurances, but it's not our fault that they got themselves into this mess. If the government won't give us that money in the form of a tax cut then they should use it to do something useful...we have a lot of problems that can be fixed with it, too! :D

    Thank you Barney Frank(D) and your Party for ignoring the facts presented to you as early as 2003 and again in 2005 and written about in Money Magazine in Oct 2005. Now your sitting on the commitee to get us out of this mess? It's time for you to get voted out! you were wrong about this issue and about voting against the surge.

    Okay...I agree the bailout is probably necessary to keep the country going...But do not give it to the people that got us into this mess..they should have their assets siezed and be put on trial by the justice department for refusal to meet their fiduciary responsibilities and for fraud. Explain to the peole in plain terms how we got here, who is going to manage us out of the problem, how will they manage these forclosures they will have.  Certainly not by the idiotic folks at HUD I hope. It is time for all of us to look at who we put in office and possibly throw the rascals out and have the new ones throw out the civil servants that are entrenched in Washington.  We need a housecleaning not just promises about how things are going to be.  Both parties are to blame and are wrong, we must suffer the consequences.  Wake up folks, call your friends, write in a candidate you don't have to vote for who is on the ballot it is time to take back our Republic and return to sensibility.  It is not time go over the edge into socialism.  

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