By RUFUS G.W. SANDERS, Register columnist
Dear President-elect Obama:
I am aware that you are probably receiving ideas and suggestions from all over the place as to what to do about everything from the failing economy to the war between Hamas and Israel. By no means do I want this little note to appear to be presumptuous, pompous or arrogant. After all, who am I to tell you what to do?
I am aware that you come to this office with more pressure than any president has faced since maybe Washington, Lincoln, or FDR. Washington had to turn the 13 colonies into a democratic state independent of British control and European influence; Lincoln had to deal with bringing the Union back together; all while dealing with the issue that separated them in the first place -- slavery. FDR had to deal with the reconstruction of the country after the worst economic disaster in our history had left us totally vulnerable and destitute.
God knows I believe that you are more than able to get us back on track; but just the same I realize you are only human. My prayer is that we are not expecting too much of you; after all, you can't walk on water. But I feel good about the fact that by all indications at this point most people seem to wish you well! I have not heard one despairing comment. And mind you given my line of work I can hear a lot of despairing comments.
Recently while on holiday I was exposed to a plan to help this country avoid what appears to be an approaching depression. You have said yourself if we don't do something quick that unemployment could hit 10 percent. This is the worst economy this country has ever faced! While it does not appear to be so to many; especially those at the top and the high middle class, who are just now starting to live off of their reserves. It's not going to take much longer before they will be hit hard times like the poor, unemployed and disenfranchised are dealing with now. This is why your stimulus plan is so very important just as was all the FDR stimulus plans were following the depression of the 1930s and the end of World War II.
We are told that things are going to get really ugly in 2009. This economy is in a free fall. That's why I find it difficult to understand why Senate Minority Leader Mitch McConnell is saying things like, "We must prove to taxpayers that the stimulus bill is not wasting our money." I ask, "What money?" Can't he see we are using every dime we have just to stay afloat? And then the nerve! It was on his watch for the last eight years this economy has mushroomed to these proportions.
Of course your plan will create jobs and grow the economy and of course it will also create more government spending, more bureaucrats and concerns about deeper deficits; but they left us with a deficit of $1 trillion. Since their plan of hosting two wars simultaneously, relocating factories and outsourcing businesses to Mexico, India and China has not worked, let's try your novel idea of putting our money back into America.
First, stimulate the housing sector by offering citizens a 30-year mortgage at a 1.5 percent fixed interest rate. Since this administration has lent money at low rates to companies and businesses for so long and it has not worked, why not lend it directly to the people?
According to economist Dennis Paulaha, this would work because:
n It would stop home prices from falling which they are doing now at an alarming rate, and it would prevent the exponential rise in house foreclosures.
n It will let people keep their houses and allow everyone to save and even spend more. With the government refinancing it will cut monthly payments in half, which would stimulate the economy.
n It would increase credit and money immediately and it would generate cash flow immediately.
n It would create jobs. With money flowing companies will stop closing down and laying off.
n It would reduce the deficit, because this program would be not about spending money, but about generating money.
n It would reverse the economic decline immediately in the banking sector, by reducing the losses of mortgage holders; and
n It would increase home values increasing in tax revenues for cities, counties and states.
This plan could be implemented immediately and, unlike the Bush plan of giving billions of dollars to corporations -- who tend usually not to share with the general population -- this program would be directly for the people who have always been the chief investors in this dream called America.
We need this program which trickles up from the people rather than down from the corporations. It could do for the economy what the G.I. Bill did for middle class growth after the Korean War.
Rufus G.W. Sanders, Ph.D.