BARACK'S BRILLIANT PLAN --- Economic Rescue Package So On The Mark It Would Be A True Game Changer

[DogPoundPup]

by

Ben F. Terton




October 14, 2008 – Half a decade. That's how long I've waited to write this article.



For half a decade the only articles I've been able to write were the ones that explained that, despite "expert" commentary to the contrary, the nation was headed toward a major economic collapse. And then that the collapse was beginning. And then to repeat, yes, really, there's going to be a collapse. And then, finally, I guess now you see what I meant.



The reason I've been able to predict exactly what was going to happen to the economy half a decade ahead of time was not because I'm psychic. It was because during that period, with Republican conservatives in control of the government, there were no significant changes of policy. And so the disastrous course that was set beginning with the first round of Bush tax cuts just trickled on and on, like a slow motion bullet headed toward the nation's heart but with the nation pinned there by the GOP, blindfolded by media nonsense, and so doomed by an easily escapable problem.

Any significant change of policy during that time could have headed off this disaster. But neither Republican nor Democrat ever really hit the mark.

Until now.

Senator Obama's plan was shocking for many reasons. So far ahead in the race, it was unexpected that he would release such a bold, detailed plan. But more than that, it was truly shocking to see, for the first time in a generation, a politician hit a mark so directly on the head. Delivering exactly to the true middle class, rather than to either the poorer people or the richer, Obama's simple, relatively cheap economic rescue plan, if enacted, would immediately and significantly alter the course of the American economy for the better.

Here's why this plan blows all previous ones away......
http://www.moderateindependent.com/v6iOCT142008Baracksplan.htm

[Common Sense Party]

1. As a former Republican, and being surrounded by Repubs,

I agree that the $3000 tax cut for each job created IN AMERICA will go over very well with folks on the right. It just makes sense.

The other part that allows people to w/d from their 401(k) without penalty? I think it's stupid and short-sighted, especially now that account values are so low. I wouldn't call it brilliance at all.

[DogPoundPup]

3. It's left up to the individual to decide!

No penalty to get their household out from under credit card debt? Weigh the options is the opportunity he gives them.

[Common Sense Party]

5. I understand that. But it's almost always a bad idea to w/d

retirement savings, especially during a bear market. That's years of savings and compounding they can never get back. Plus they still have to pay ordinary income tax on the withdrawal.

I'm all for getting out of debt, but this doesn't seem to be the wisest way to approach it.

[endthewar]

26. Obama's economic advisor explain the 401k withdrawal thing

as something that was in essence already in the spirit of the law. The way he talked about it on TV essentially made it almost a non-issue. Also, I think that McCain has this in his plan as well. If that's what is needed to stave off a foreclosure, then so be it. 2% of Americans in foreclosure and the world economy is on the brink. We've got to keep people in their homes. :hi:

[Schema Thing]

4. If you need to w/draw from your 401k, there is probably a good reason

[damonm]

7. Must respectfully disagree on the 401(k) issue...

At this point, with values low, those accounts can recover the withdrawn value. A couple of years ago (due to some stupid decisions on my part), I found myself in a situation where I needed to make such a withdrawal. As of early this year, the market had made back 120% of the withdrawn amount.

In the past couple weeks, though...:puke:

[Common Sense Party]

8. Must respectfully disagree with your respectful disagreement.

When you withdraw you're liquidating shares of your mutual funds. A year ago those shares might have been worth, say, $50 a share. Now that the market is down, they're $30 a share. You have to liquidate more shares to withdraw the same $10,000. You can't get those shares back.

You withdrew when the market was in an upward swing. People today are withdrawing when the market is low. Buy low, sell high is what we want to do as investors. This is definitely selling low.

[Samantha]

12. Heard an Obama commentator say today withdrawals are

allowed under the Obama plan due to hardship. Many companies allow employees to make withdrawals for that same reason, but they also establish a repayment plan. I do not know if a repayment plan is a part of Obama's component.

Sam

[Common Sense Party]

14. No a hardship withdrawal is different from a loan.

If you borrow from your 401(k) plan, you have to pay it back with interest within 5 years through payroll deduction.

A hardship withdrawal is final. You withdraw, pay the taxes and penalty (Obama's plan waives the penalty) and the money is forever out of the retirement plan.

[Samantha]

22. Not my field of expertise, but a woman I work with got a hardship

loan when her SO came down with a huge medical problem. She had to pay it back within 9 months. I know about this because when my basement flooded and I was staring at HUGE bills, she suggested I apply for a loan through our 401(k) plan and told me about the repayment requirement. I passed (still working on those repairs). I am under the impression that different 401(k) plans are structured differently because my various employers always spelled out circumstances under which one could make a withdrawal when we signed up.... Two items from other plans were education loans and down payments on houses.

Sam

[Common Sense Party]

23. It is my field of expertise. There is a difference between a loan

and a withdrawal. A loan you pay back. A withdrawal you don't.

You're right that plans are structured differently. Some plan documents allow hardship withdrawals, some don't.

Some allow loans, some don't. Some say loans can only be taken for specific reasons, some say for any reason.

It's all up to the employer when they establish the retirement plan.

[Samantha]

24. Okay, I get it ... use the right word at the right time - loan versus

withdrawal. Thanks.

Sam

[w4rma]

13. Its only for the first $10K per year. (nt)

[Common Sense Party]

15. Understood. Still a bad idea in most cases. nt

[vaberella]

21. I don't see how that's bad. I'm allowed with my IRA to take out $8000

per year without penalty. I still don't touch it.

[RoadRage]

2. K & R !!!

[dkofos]

6. It's a start. And it does bring out the leader in him.

[chill_wind]

9. Good article. I would disagree with the "Snoozer" part--

"The last part of Obama's plan is a bit of a snoozer - a 90-day freeze on foreclosures. Not something too exciting one way or another. But it does buy some time for the other parts of the plan to be enacted, as well as for people to make plans for dealing with their mortgage situations."

For too many families in home mortgage crisis, I have to think 90 days is a lot more than the huge nothing we would get under more repub rule. Surely many families would welcome that as a first step in buying some time, even if it means more time coping and preparing for loss.

[pokercat999]

10. I'm assuming you know a lot more about the US economy

than I do. As an average middle-aged citizen of about average income and I would guess, of average economic intelligence, I think the "plan" is about as good as we can expect in this election year but, at it's heart, just slightly better or maybe even a lot worse than doing nothing. More and /or continued spending on junk made in China that has a very short life span before it ends up in an American landfill is not an "economic plan". Encouraging people to use long term saving to payoff short term debt that was used to feed an unholy consumption habit is not what I would call intelligent use of the funds.

Obama's plan is shocking in that it is so short sighted and about useless, BUT it is soooo much better than the alternative offered by Mc Same that it looks down right brilliant.

What would be better but impossible because it could/would never be proposed is:

Nationalize Health Care: make all health care in the US Free and provided by a National Health Care Service based on a military model.
Nationalize Auto and Home Insurance; why should profit be made by companies selling a state mandated insurance product. Unlike health care industry, insurance companies could still operate, they would just have to compete under strict regulation with the federal plan. Auto insurance could be provided by a gas tax, thus people who drive the most would pay the most. Bad drivers with multiple accidents would have to pay extra when they renew their tags or drivers license. When gas is replaced and fuel is no longer needed the cost of insurance could be added to drivers license. Home insurance could have private competitors but the coverage and their reserves would have to be strictly controlled by regulation.
Cut the DOD budget by 25% each year for the next four years bring home as many American service people as possible.
Eliminate the "black budget".
Eliminate all corporate welfare.
Institute a windfall profits tax on oil/gas producers and use the tax revenues to fund the quest for renewable energy and a environmentally safe replacement for the internal combustion engine in multiple "Manhattan" style projects.
Ban imports from any country not meeting a set of basic worker rights and conditions that meet our OSHA rules and minimum wage standards, thus returning many jobs to America.


That's a START on a program I would fight for and donate my money to support! But it can't be proposed pre-election because anyone with this much common sense would never be elected in this country of useful idiots. It couldn't be proposed after election because on Nov 5th the race for 2012 starts and everyone knows you can't get elected if you think outside the proverbial box. Too bad America, I hope we all enjoy what's coming, just around the corner.

[Hope And Change]

11. K & R!

[Overseas]

16. K&R --- Excellent article too !

Love the part about Obama attending to helping the people rather than the large corporations, and the comparisons with how Republican policies functioned to enrich those at the top.

[Versailles]

17. Heh.

I posted the same thing in the general forums.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4237296&mesg_id=4237296

great article.

[Coexist]

18. K & R!

[cyberpj]

19. KISS - It works, it's explainable, it's hard to knock. K&R

[vaberella]

20. We were talking about this plan in another thread...Great idea. K*R.

:kick:

[Psst_Im_Not_Here]

25. In some 401K's the interest you pay for a loan

is paid to yourself(your account). That's the way it is with ours. Another point, the interest you pay on credit cards is much higher than the money you would lose in a 401K. Although, the market will rebound and the amount you'd lose by withdrawing that is indeterminable at this point. It would depend on how much you take out, where the money is coming from and how long it takes you to pay it back to your account.

It wouldn't be a bad idea for everyone, nor would it e a good idea for everyone. Much thought and analysis would be needed. How much high interest debt do you have? How long will it take you to pay it (high interest credit card debt) off without a loan or withdrawal? How badly hit is your 401K? How long until your retirement? Different answers for different situations. Certainly some would be better off taking money out of their 401K to pay off high interest debt. Some would not. But, it's a great start and one solution that would help stimulate the economy, while the longer term plans are made and enacted.

[ieoeja]

27. Another article from the same site on why Reaganomics created this disaster.

"You see, strong 'worker productivity' - while touted by conservatives as a 'strong fundamental' - really can be a sign of coming disaster. How so? Well, if you take a worker, and make him do the work of two men, he is being much more productive. According to McCain's measure, that would be a great sign that the economy is still strong - strong 'worker productivity.' Even better, if you take that same worker and cut his pay in half, so that now he is doing twice the work for half the pay, then this is the best of all: worker productivity would be incredibly high, AND economic 'growth' would be incredibly strong, since corporate profits would increase nicely.

"So. We have been trucking along. The American worker John McCain referred to has been worked harder and harder, for more and more hours, being asked to do the work of more and more men, while the real take home pay of that worker has declined and declined. The entire media has reported this - according to the conservative principles they universally subscribe to - as an economy doing well. But the reality has been that this poor worker, ie the American people, have been dying. They haven't been able to make ends meet. Yes, they have kept spending, but only because credit cards and borrowing allowed them to."

http://www.moderateindependent.com/v6iSEPT172008Economicreality.htm

[Quantess]

28. Kick

[quantass]

29. wow, gotta rewatch obama's vid