Economic Stimulus Package

Hospitals & Asylums

Economic Stimulus Package HA-20-1-08

By Tony Sanders

Introduction / Economic Growth Overview / Balance of Payments / Balanced Budget / Conclusion / Bibliography

Conclusion

53. No Economic Stimulus Package (ESP) since the 1970s would be complete without establishing an Economic Statistics Program (ESP). Previously it was determined that the Bureau of Economic Analysis (BEA) must go and an Economic Statistics Program (ESP) is a poetic successor for the agency that has been keeping macro-economic statistics on the United States since 1937. The inequality we hope to redress can be traced to the 1970s when the command economy of the Drug Enforcement Agency (DEA) infringed upon both the acronym of the Bureau of Economic Analysis (BEA) and the medical establishment. Freedom from fear and want are fundamental to economic success. The extra-judicial pillaging was later aggravated by the creation of the obscene Court of International Trade of the United States (COITUS) in 1984. The balance of payments has dramatically deteriorated since then and became alarming at the turn of the century. After some deliberation, the name Economic Statistics Program (ESP) is decided upon as the best successor to the BEA. A US International Tribunal (USIT) would succeed the COITUS. Having embarked on this ESP to assist Congress in preventing a recession in 2008 I have come to the conclusion that the name ESP is the best successor to the BEA. Creating an ESP would be the beginning of all ESP. ESP will be included in the Chapter on the Future of the Constitution of Hospitals & Asylums Non Governmental Economics.

54. An Economic Statistics Program (ESP) would stimulate the economy in many ways. First, a ESP would be independent and the invisible hand of liberal market economics would not take on the appearance of an extra-judicial iron fist. Second, ESP would broaden the psychological horizons of economic decision-making, by eliminating the mind killer, fear, and inserting respect for "extra sensory perception" provided by federal statistical agencies, to encourage market participants to use their senses. Third, ESP would improve agency standing to deliver Economic Stimulus Packages to Congress in a timely fashion. Innovations in financial markets have created a wide range of investment opportunities that allow capital to be allocated to its most productive uses and risks to be dispersed across a wide range of market participants. In the initial experimentation phase, the terms and characteristics of a new policy are adjusted in response to market acceptance--or lack thereof. To properly value a policy one must judge its potential for risk and return, assess its market acceptance and liquidity, and determine the extent to which the risks of the policy can be hedged or mitigated (Mishkin 2007).

Sen. Barack Obama (D-Ill.) said,

"As our economy changes, let's be the generation that ensures our nation's workers are sharing in our prosperity."

Sen. Hilary Clinton (D-NY) said,

"The leadership here in Washington seems to ignore the middle class and hardworking families across our country,"

55. Sixty percent of Americans think that life for the middle class has gotten worse in the past ten years (CBS 2007). Income inequality became a serious issue with the passage of H.R. 2, "Fair Minimum Wage Act of 2007." passed 315-116, Jan. 10th, 2007. The hike in minimum wage was much needed. Income inequality has become alarming. The rich are becoming extremely rich while the number of poor people is increasing; the middle class is finding it harder to afford their mortgage. For many years economists have agreed that US GDP statistics were artificially high and did not reflect the per capita income of the average citizen. The US must moderate their prospects for economic growth as a developed nations whose potential is limited by the law of diminishing returns. A more effective method of gauging prosperity is pre-tax, Gross National Income, or disposable national income. An industrialized nation should aim to make marginal gains in GNI over GDP. GNI figures are however also misleading because they do not account for the cost of taxation and work related expenses or why so much wealth is concentrated in the hands of a few. The US Census Bureau estimates that in 2004 the median family income was $44, 334 and the average family size was 2.59, yielding a per capita income of $17,117; average per capita money income was estimated at $21,587 in 1999. In 2006, the average American worker earned $29,544 (Waxman 2007). Income inequality, as measured by the Gini co-efficient, has steadily increased since 1970, before which time it flucuated between 0.35 and 0.38. Between 2000 and 2005 the Gini inequality coefficient increased from 0.433 to 0.440. Using the Gini co-efficient for 2005 the per capita GDP was $23,132 and the per capita income was $19,480. Thus explaining the discrepancy between the “high” figures of the BEA and the credible income statistics of the US Census.

56. Inequality is the fundamental American economic problem. Researchers must disseminate GDP, GNI, often called disposable personal income, and median income, that has been deflated using the Gini co-efficient, to fully express the circumstances of the majority of Americans. Inequality is not defined exclusively by the perplexing widening gap between the income of the rich and poor explained by the Gini co-efficient, but extends to inaccuracies in many national accounts. For instance, Gross Domestic Product (GDP) growth figures for a developed nation should be in the vicinity of 2% annually. The law of diminishing returns, not surprisingly, also applies to trillions of dollars. A federal statistical agency must not inflate GDP figures to finance a deficit. The US seems to have exhausted their credit with higher GDP growth than GNI growth and now the stock market cannot afford to over-invest when the BEA, “gets high” without crashing afterwards. Another example of inequality, although the BLS reports a non-farm labor force of only 139 million in 2007, they claim 62% of the 300 million person population is employed, although the actual number is closer to 50%, taking into consideration farm labor and the unemployed. There are far more retired people, children and domestic caregivers reliant upon non-employment public and private sources of income, than are given credit for.

57. Postwar US economic history can be divided into three eras, the postwar boom, from 1947 to 1973, the time of troubles, when oil

crises and stagflation wracked the US economy, from 1973 to 1980 and the modern era of reasonable growth with rising inequality from

1980 until the present.  During the postwar boom the real income of the typical family roughly doubled, from about $22,000 in today’s

prices to $44,000.  That’s a growth rate of 2.7 percent per year.  The time of troubles temporarily brought growth in median income to

a halt until inflation was brought under control.  Since 1980 median family income has risen only about 0.7 percent a year.  Even during

the best of times the Reagan era “morning in America” expansion from 1982 to 1989 and Clinton era boom from 1993 to 2000 family

income grew more slowly than it did for a full generation after WWII (Krugman 2007).  There are tax breaks and money for the richest in

America and the very rich, but I think that it’s clear that there’s a growing gap between rich and poor in America, the haves and the have-

nots (McCain 2008)

58. As executive compensation skyrocketed from 2003 to 2004, the average after-tax income for the richest 1 percent of U.S. households went up almost 20 percent, while after-tax incomes for the middle fifth of the nation - the middle of the middle class - went up only 3.6 percent. Looking back 25 years - starting in 1979 - the contrast is even greater. The top one percent saw a whopping 176 percent jump, while the middle fifth of Americans saw only a 21 percent rise. That's a big difference, but although 21 percent still seems high. In fact a new study shows that in 2005, the top 10 percent of Americans collected almost half of all reported income in this country. This is their biggest share since 1928 (Krugman 2007). Executive pay is rising rapidly. The chief executive officers (CEOs) of the 250 largest U.S. companies, as identified by Fortune magazine, received an average of $18.8 million each in 2006, an increase of 38% in just one year. A decade ago, the aggregate pay of the top five executives at large U.S. companies amounted to about 5% of corporate profits. By 2003, the share of corporate earnings paid to top executives had doubled to 10%. In 1980, CEOs in the United States were paid 40 times the average worker. In 2006, the average Fortune 250 CEO was paid over 600 times the average worker. While CEO pay has soared, employees at the bottom of the pay scale have seen their real wages decline. In real terms, the value of the new federal minimum wage, $5.85 per hour, is 13% below its value a decade ago and shall rise to $7.25. In 2006, the average American worker earned $29,544 (Waxman 2007).

59. Real median household income in the United States rose by 1.1 percent between 2004 and 2005, reaching $46,326, according to a report released today by the U.S. Census Bureau. Meanwhile, the nation’s official poverty rate remained statistically unchanged at 12.6 percent – 37 million in 2005. The percentage of people without health insurance coverage rose from 15.6 percent to 15.9 percent (46.6 million people). Poverty rates remained statistically unchanged for blacks (24.9 percent) and Hispanics (21.8 percent). The poverty rate decreased for non-Hispanic whites (8.3 percent in 2005, down from 8.7 percent in 2004) and increased for Asians (11.1 percent in 2005, up from 9.8 percent in 2004). The poverty rate in 2005 for children under 18 was 12.9 (17.6 percent) remained higher than that of 18-to-64-year olds that was 20.5 million (11.1 percent) and that of people 65 and older 3.6 million (10.1 percent). There were 7.7 million families in poverty in 2005, statistically unchanged from 2004. The poverty rate for families declined from 10.2 percent in 2004 to 9.9 percent in 2005.

60. Treasury Secretary Henry Paulson reported that President Bush is putting together his first public call for a "robust" emergency fiscal stimulus bill to get cash quickly into the pockets of consumers and jump-start a sagging economy. Any package should be effective, simple and temporary - mirroring calls by Democratic lawmakers for a "timely, targeted and temporary" stimulus measure. "What he believes is that we've got to do something that is robust. It's going to be temporary and get money into the economy quickly. It's going to be focused on consumers, individuals, families - putting money in their pocket. And it's going to be focused on giving businesses the incentive to hire people, to create jobs. Taxpayers could receive rebates of up to $800 for individuals and $1,600 for married couples under a White House plan. Lawmakers were instead discussing a $500 rebate for individuals, the aides said, with details for couples and people with children still being negotiated. The rebates would likely be limited to individuals with incomes of $85,000 or less and couples with incomes of $110,000 or less.

61. The Tax Policy Center at the Brookings Institution agreed, we do need a quick, temporary, fiscal boost of roughly $100 billion and that it should be built around both a tax rebate and traditional countercyclical measures such as expanding food stamps (Gleckman 2008). Congress must be timely in their stimulus package that should target oil price stability, tax rebates for low-income workers, mortgage loan forgiveness, improved unemployment insurance by temporary employment agencies, the disability claim backlog and food stamps. 29.6% inflation in the price of gasoline led to a 17.4% inflation in energy costs that spread to food costs that rose by 4.9% while overall CPI increased by 4.1 percent, the biggest since a 6.1 percent jump in prices in 1990 (Crutsinger 2008). Bush said in a White House announcement that such a growth package must also include tax incentives for business investment and quick tax relief for individuals. To be effective, he said an economic stimulus package would need to roughly represent 1 percent of the gross domestic product.

62. Treasury Secretary Henry Paulson said “1 percent of GDP would equate to $140 billion to $150 billion, which is along the lines of what private economists say should be sufficient to help give the economy a short-term boost. One Republican official hoped to target about $100 billion toward individuals and about $50 billion toward businesses. This is an excellent opportunity for the political parties to achieve their economic objectives in an election year when the Presidential candidates would compete to balance the budget of the 111^th Congress. "The cost of not acting has become too high," Paulson said. "We must act now." While Bush focused solely on taxes, Democratic and Republican leaders in Congress have been working on a broader package that also would include a temporary increase in food stamps and an extension of and perhaps increase in unemployment benefits. White House estimates show that a stimulus in the range of what Bush talked about could create 500,000 additional jobs this year (Taylor & Riechmann 2008).

63. According to the Federal Reserve’s large-scale econometric model, a one percentage point drop in the federal funds rate enacted immediately would add nothing to the level of GDP in the current quarter, 0.1 percent next quarter, 0.4 percent by the end of the year, and 1.0 percent by the end of next year. A temporary tax cut amounting to about $70 billion in today’s economy, distributed in the second quarter to households that are likely to spend much of their extra income, would boost the level of GDP by about 0.5 percent during the second and third quarters of the year. Between July and September 2001, the government mailed income tax rebates of $300 for individuals and $600 for married couples. Ninety million households received $38 billion in rebates, but tens of millions of working households that were not paying positive income taxes did not receive rebates. Another approach option is to increase food stamps on a temporary basis; for example, anyone receiving food stamps might automatically receive 20 percent more stamps for six months. This change could be administered easily and quickly by raising the value of electronic benefit cards issued to food stamp beneficiaries (Elmendorf & Furman 2008).

64. House Speaker Nancy Pelosi, D-Calif., and Republican leader John Boehner of Ohio emerged from a rare meeting, promising to craft legislation to energize the weakening economy. Although Republicans and Democrats differ over what provisions should be part of any such package, there's widespread agreement that tax rebates along the lines of the $300-$600 checks provided in 2001 are likely to part of the measure. The country last suffered a recession in 2001 (Aversa 2008). Pelosi said she wanted legislation enacted within a month and said the government must "spend the money, invest the resources, give the tax relief in a way that again injects demand into the economy, puts it in the hands of those who need it most and into the middle class ... so that we can create jobs." Senior aides to House Democrats and Republicans said in addition to included tax rebates for individuals, the emerging measure would contain tax breaks for businesses investing in new equipment, increases in food stamps, and higher unemployment benefits.

65. Federal Reserve Chairman Ben Bernanke entered the stimulus debate in an appearance before the House Budget Committee where he endorsed the idea of putting money into the hands of those who would spend it quickly and boost the flagging economy. He stressed that it must be temporary and must be implemented quickly - so that its economic effects could be felt as much as possible within the next 12 months. Putting money into the hands of households and firms that would spend it in the near term is a priority. Especially important is making sure a plan can put cash into the hands of poor people. Bernanke declined to endorse any particular approach, but preferred one that would not have a long-term adverse impact on the government's budget deficit. He told lawmakers, “We're not forecasting recession but, rather, at this point, slow growth. Still, the toll of the housing and credit debacles will be felt into early next year”. Bernanke signaled he was open to additional help from the Democratic-controlled Congress and the White House, which are exploring economic stimulus packages, that could include tax rebates. I'd like to see what emerges from the process, and I look forward to talking with and discussing with proponents some of the various options that might be put on the table (Taylor 2008)

66. There are three principles to an effective economic stimulus package – timeliness, targeting and temporary. First, to be effective and not counterproductive, fiscal stimulus must be timely. If fiscal stimulus is undertaken unnecessarily, the result could be over-expansion and higher inflation. If fiscal stimulus is enacted too slowly, output and incomes could fall first and then stimulus might arrive after the economy has begun to pick up speed again. Achieving timely policy is especially challenging because timeliness involves not just the enactment of tax cuts or spending increases but also the implementation of policy changes and getting the money out the door. A second key factor in designing fiscal stimulus is effective targeting. Targeting is important in two respects. The first is purely macroeconomic: tax cuts and spending increases should be directed so that each dollar generates the largest possible increase in short-run GDP. The second is based on fairness to households: tax cuts and spending increases should be directed so that they provide the greatest benefit to people who are affected most adversely by an economic slowdown. These two aspects of targeting are complementary because the poor are more likely to spend any money they get. The third principle for effective fiscal stimulus is that tax and spending changes must be temporary and not increase the already large long-run budget deficit. While fiscal stimulus can increase economic growth in the short run, it will simply result in higher inflation or tighter monetary policy in the long run (Elmendorf & Furman 2008).

67. Good communication is essential to successful central banking. It is critical to preserving the democratic accountability and public legitimacy. Good communication strengthens the effectiveness of good policy, largely because expectations are so important to the choices that households and businesses make about spending and saving and about prices and wages, as well as to the asset prices that help shape those choices. Private decisions are more likely to reinforce the achievement of central bank objectives if decision-makers understand the goals of the central bank, its evaluation of the forces bearing on the economy, and its possible responses to economic shocks (Kohn 2008). Monetary policy needs to be timely, decisive, and flexible. First, timely action is crucial when an episode of financial instability becomes sufficiently severe to threaten the core macroeconomic objectives. In such circumstances, waiting too long to ease policy could result in further deterioration of the macro-economy and might well increase the overall amount of easing that would eventually be needed. Second, policymakers should be prepared for decisive action in response to financial disruptions. In such circumstances, the most likely outcome--referred to as the modal forecast--for the economy may be fairly benign, but there may be a significant risk of more severe adverse outcomes. Third, policy flexibility is crucial throughout the evolution of a financial market disruption. During the onset of the episode, this flexibility may be evident from the decisive easing of policy that is intended to forestall the contractionary effects of the disruption and provide insurance against the downside risks to the macro-economy (Mishkin 2008)

68. The first order of business is the February 1 OPEC meeting that the United States must appeal to for increasing oil production to lend credence to the World Bank who predicts that oil prices are likely to decline gradually as record crude prices weaken demand so that a barrel of crude oil will cost $84.10 on average in 2008 and fall by 6.8 percent to $78.40 a barrel in 2009. It estimates that the average price of crude oil in 2007 was $71.20 a barrel. If you look at the fundamentals, there is scope for lower oil prices. The World Bank forecasts more or less a sustained, gradual decline in the price of oil (Wong 2008). US GDP statistics are misleading. To put the US into perspective, as an industrialized nation, the law of diminishing returns should keep the GDP growth around 2% while middle income nations grow at rates of 4% and the least developed at rates greater 7%. In developed nations worker’s wages should grow faster than GDP. The US could grow steadily if they would moderate their expectations for economic growth to 2% so overestimate and devaluation in some quarters does not lead to shortfall in others. Inflation in the price of oil has eroded the American household income to the point where since 2004, the average American gets in debt. After several weeks of oil costing more than $100 a barrel the US is resolved for OPEC to increase oil production in 2008.

69. Second, with tax season only two month away Congress must legislate a tax rebate swiftly, the President agrees. Tax rebates along the lines $300-$600 checks were issued to relieve the recession in 2001. These rebates are probably the only happy thought taxpayers have about the current President. The proposal was for taxpayers to receive rebates of up to $800 for individuals and $1,600 for married couples. Lawmakers are discussing a $500 rebate for individuals and $1,000 for people with children. The rebates would likely be limited to individuals with incomes of $85,000 or less and couples with incomes of $110,000 or less, that is estimated to benefit the four 23.75% quintiles, nearly 110 million households, at a cost of $82.5 billion. The federal budget would be relieved if the rebate were limited to the lowests two income brackets individuals making less than $25,000 and families with incomes less than $40,000, an estimated 55 million households, at a cost of $41.25 billion (Taylor 2008). Immunity from garnishment must be assured by the legislature, so that the money is not stolen by greedy creditors, but actually gets into the hands of the needy. The tax rebate package is going to cost taxpayers between $41.25 billion and $82.5 billion. The rebates are going to come directly out of 2008 tax revenues projected at $2,771 billion by the OMB for which the President already predicts a deficit of –$155 billion. With the proposed $82.5 billion rebates for 110 million households the deficit would be -$237.5 billion. This cost can be mitigated to $41.25 billion, a deficit of -$196 billion, if the rebates were only for the poorest 55 million households. This means the remaining $100 billion budget for individuals is either $17.5 billion or $58.75 billion.

Benefit Programs

Unemployment Insurance

Food Stamps

TANF

SCHIP

Disability Insurance

Program Total

Cost in billions of dollars

$5-10 billion

$1-2.5 bill/ mo.

$15-30 bill/year

$5-10 billion

$5-$10 billion

$1.15 bill/ mo.

$13.8 bill/year

$17--68 bill.

Number of Beneficiaries

1-2.5 million

5-10 million

2.5-5 million families

15-25 million low income children

2.3 million beneficiaries

70. Third, traditional countercyclical measures such as expanding food stamps, temporary assistance for needy families and unemployment insurance are a trade off with $41-83 billion tax rebates for the $100 billion targeted for individuals. The federal government has budgeted $100 of $140 or $150 billion for this economic stimulus package. Democrats should administrate this money to their social welfare programs.

71. Both unemployment insurance UI Temporary Assistance for Needy Families (TANF) should be expanded by $5 billion for a total of not less than $10 billion and not more than $20 billion through the intermediary of temporary employment agencies advertising “unemployment insurance in one month”. SCHIP should be funded $5-10 billion until they seamlessly assume control of $8 billion annual, Master’s Tobacco Settlement in 2009. Food cards have been wildly popular since their inception in 2003 and the federal government could print out 5-10 million one time food cards of $250 dollars, at a one time cost of $1.25 billion to $2.5 billion. There are 2.3 million petitioners for disability insurance who would most benefit from one-time payments of $500 at a cost of $1.15 billion, the month. To secure the state’s share in unemployment and food stamps the federal government must satisfy the backlog of petitioners for social security disability insurance to the full extent of 50% of the savings of the $8 billion annual savings of the DI trust fund.

72. .25 million people, of 8.5 million unemployed people, were receiving some form of unemployment insurance (UI) January 12, 2008 at an estimated annual cost of $20 billion. 2.75 million people were receiving federal UI benefits and 3.5 million received UI benefits from state programs. A year earlier the volume was 3.12 million. Unemployment insurance benefits are generally limited to 26 weeks, thereby meeting the temporary criteria for inclusion in an economic stimulus package. In 1999, the national average weekly benefit amount was $215 and the average duration was 14.5 weeks, making the average total benefits $3,118. The unemployment insurance system would be strengthened if temporary employment agencies could be required to insure the estimated 2.5 million uninsured temporary workers at a cost to the federal and state governments estimated at $5 billion - $10 billion. This money would be offset by premiums collected from temporary workers that would pay, as much as, all their payroll taxes, back to them while these four or five percent of the population are waiting for their next assignment from an employment agency.

73. Federal and State expenditures for the Temporary Assistance for Needy Families (TANF) program totaled $26.3 billion in 2003. States spent $10.1 billion, or 41.8 percent of their total expenditures, on cash assistance. When TANF was enacted spending on cash assistance amounted to 73.1 percent. Without assurance of pay participation in public assistance programs by custodial parents whose total number amounted to 13.7 million in 1996 fell from 40.7, 5.6 million families, to 28.4 percent, 3.4 million, between 1993 and 2001. States also spent $12.9 billion on various non-cash services designed to promote work, stable families, pregnancy protection and childcare, at a system cost of $2.5 billion. An economic stimulus package should both increase the cash assistance from TANF by $5-10 billion and finance children’s health at an estimated cost of $5-10 billion until the 111^th Congress in 2009 when the $8 billion annual Master’s tobacco settlement agreement could be written over to defray as much as 75% of the cost of SCHIP, liberating tax dollars for administration of cash assistance to needy families.

74. The nearly 4.3 million births in 2006 was the highest since 1961, near the end of the baby boom, mostly as the result of an increasing population. The United States has a higher fertility rate than every country in continental Europe, as well as Australia, Canada and Japan. The U.S. fertility rate, reached 2.1, enough for the population to replace itself. America's teen birth rate rose for the first time in 15 years. Births are becoming more common in nearly every age and racial or ethnic group. Birth rates increased for women in their 20s, 30s and early 40s, not just teens. They rose for whites, blacks, Hispanics, American Indians and Alaska Natives. The rate for Asian women stayed about the same. Total births jumped 3 percent in 2006, the largest single-year increase since 1989. Demographers say there has been at least one boomlet before, around 1990, when annual U.S. births broke 4.1 million for two straight years before dropping to about 3.9 million in the mid-1990s. The 2006 fertility rate of 2.1 children is the highest level since 1971. Experts believe there is a mix of reasons: a decline in contraceptive use, a drop in access to abortion, poor education and poverty (Stobbe 2008).

75. A temporary increase in food stamp benefits has also been suggested. Since the advent of the electronic food card, food stamp participation increased from about 17.2 million in fiscal year 2000 to almost 25.8 million people in August 2005 at a cost of only $31.1 billion as reported by the Department of Agriculture. Taking into consideration the popularity and cost effectiveness of food card technology the federal government should print 5-10 million one time food cards with $250 on them and give them out to needy people, at a one time cost of $1.25 billion to $2.5 billion a month. These gift cards should be administrated by every social worker in town. The people could come back, if they needed any assistance again. Food assistance under the Agreement on Agriculture is the only market subsidy approved by the WTO 2007 draft text on Anti-dumping, subsidies and countervailing measures and fisheries subsidies. Whereas the 4.9% inflation in food costs exceeded the 4.1% general inflation rate, food stamps target assistance where it is needed.

76. There is a 2.3 million petitioner backlog of disability insurance petitions of 700,000 with the Social Security Administrative (SSA) Law Judges and 1.6 million with the administrative staff. Petitioners are unhappy with their level of benefits. At a one time cost estimated at $1.15 billion SSA should send their petitioners a $500 one time payment. The same monthly cost of the $13.8 billion annual petition by the 2.3 million people currently being denied. Disability insurance does not qualify as temporary relief, SSA is not garnishable or later rejectable because a person is no longer disabled. To uphold the temporary principle of the economic stimulus package SSA could administrate $1.15 billion in $500 one-time federal payments to an estimated 2.3 million petitioners, dismissing them with notes directing them to re-file at the local office if they still feel they still wish to be counted amongst the people dissatisfied with their monthly income. Representatives could also be awarded the same $500 payments. For only $1.15 billion the disability backlog could be cleared for an estimated 3 months before SSA would again be in fear of the courts. The disability insurance trust fund turned a profit of only $8 billion in 2006. The Old Age Survivor Insurance trust fund on the other hand saved $181,266 billion. Whereas the OASI trust fund can offset any deficiencies in the DI trust fund the DI trust fund is recommended to divert at least half of their savings to petitioners to meet demand. The one-time payments could be administrated again, to all petitioners, on a quarterly basis, perhaps with a 10 page writing assignment, on any topic. If “no” had a reasonable price, the appeals process would be fair enough to bypass the justice system and petition instead to federal hearing officers with the literate SSA Office of Policy, for a year, before a denial would force the dedicated petitioner to re-file with the local office.

77. Fourth, the Mortgage Relief Act, written by Sen. Voinovich (R-OH), relieves families of a tax burden when their lender forgives part of the mortgage on a principal residence, whether as part of a work-out, a short sale or a foreclosure. Before the senator’s bill became law in December 2006, the Internal Revenue Service taxed any loan forgiveness as “income.” The removal of this tax penalty now encourages homeowners and lenders to work together voluntarily and responsibly so that payments are manageable and foreclosure can be avoided. Ohio has the highest foreclosure rate in the nation at 3.72 percent (compared to the 1.69 percent national average). Franklin County is one of 32 counties in Ohio with a foreclosure rate above 24 percent. Sen. Voinovich also introduce the Expanding American Homeownership Act of 2007, which prompted the Senate Banking Committee to introduce the almost identical Federal Housing Association (FHA) Modernization Act of 2007. The FHA Modernization Act passed both the House and Senate, but in different versions, that must be reconciled for the President (Voinovich 2007). Republicans will shepherd the $50 billion in relief for businesses that is intended to foster the employment of as many as 500,000 new workers. To be targeted, the counsel for $50 billion Republican business stimulating portion of the proposal, is to adhere to the limitations on subsidies presented by the WTO 2007 draft text on Anti-dumping, subsidies and countervailing measures and fisheries subsidies under Art. 28 of the Doha Declaration, that limits non-agricultural subsidies to market research and job safety. Before investing, one must do enough market research to ensure that the venture will sustain itself. Corporations and academic institutions should invest any subsidies in research, job safety and income security. To redress market conditions corporate tax relief should target employment programs able to negotiate the mortgages of their employee(s) otherwise facing foreclosure. One time tax relief of up to $50,000 would be targeted to employers or bankers paying off the mortgages of families facing foreclosure, for one to two million homeowners. Other programs could compete, but the mortgage crisis and gasoline prices take priority. The federal government could issue $100 gas cards for needy beneficiaries who would subsidize the gasoline retailer, future bio-diesel distillers, to insulate the consumer from fluctuations in the international price of oil.

Costs and Benefits of A $140 to $150 billion Economic Stimulus Package 2008

Benefit Programs

Unemployment Insurance

Food Stamps

TANF

SCHIP

Disability Insurance

Program Total

Tax Rebates

Tax relief for businesses

Cost in billions of dollars

$5-10 billion

$1-2.5 bill/ mo.

$15-30 bill/year

$5-10 billion

$5-$10 billion

$1.15 bill/ mo.

$13.8 bill/year

$17—68 bill.

$41.25-82.5 bill

$40-50 billion

Number of Beneficiaries

1-2.5 million

5-10 million

2.5-5 million families

15-25 million low income children

2.3 million beneficiaries

25.8– 44.8 million beneficiaries

55-110 million taxpaying households

1-2 million foreclosing homeowners

25 million low income drivers