Why Raising IEOSD Will Create New Jobs.

Why Raising IEOSD Will Create New Jobs.

Professor Emeritus Peter Bagnolo

Low interest rates are helping only one group, the richest people in America, and the greedy 1%.

If the low IQ Austerity advocates gets all that it wishes; ending Collective Bargaining, cuts in pensions, Medicare, Social Security, laying-off millions of people, what will happen? Well, it cuts past and into the bone of commerce. The discretionary income of approximately 80 – 90 million people will be all but annihilated. The companies which they patronized by buying goods and services will be diminished and eventually go bankrupt and added to the present 31 million out of work and underemployed will more than double making the depression of 1929 look like a lark in the park.

The Ryan Idea is not going to bring progress, it is going to destroy the working class and their unions and that is exactly  what the far right wants. What bothers us most is that our people, some of the democrats, are buying into this massive stupidity. Austerity is exactly the worst approach. See the success of Argentina, Brazil, and the Northern European nations like Sweden, Norway and Denmark, who used FDR’s processes. One does not pull back on marketing when business is dragging it increases and improves marketing.

I have spoken to a number of entrepreneurs, all of who say the same thing; if they had a stronger income from savings, they would invest or spend it on a variety of things. That money would make a needed entry onto the market place.

There is right now $7.77 trillions in savings of various sorts, Treasuries, bank accounts, etc., in US banks at a near zero rate of IEOSD-(Interest Earned On Savings Deposits) yielding to depositors next to nothing. Instead of the depositors gaining the banks are keeping it and doing nothing with it. 

At a rate of 5% on IEOSD the $7.77 trillions would yield $385 billion dollars, which, if given at least that rate of 5% (IEOSD) as was the case before the attack on Iraq) estimates say the depositors would pump into the market place about 75% - 90% of that money. The 99% own about 50% ($192 Billions) of that cash. They would spend or invest it quickly and thus will create sales and jobs. The present rate of near zero IEOSD pumps NOTHING into the economy and Mr. Bernanke wants to keep it that way for almost three more years, while the banks are keeping the interest which depositors, should be receiving.

I further suggest that Either by an Executive Order or a new Bill ad huge excise taxes on all currently outsourced jobs which bring outsourced goods to meet or exceed prices of similar goods made in one of the 50 states of the USA.

The United States has had a public debt since it’s founding in 1791. Debt relative to GDP rose rapidly during the 1980s under president Ronald Reagan, whose economics policies increased military spending and lowered tax rates. Gross debt in nominal dollars quadrupled during the Reagan era as well as during the era the senior Bush presidencies between 1980 -1992. The net public debt quintupled in nominal terms. Debt held by the public had declined from 28% to 26% of GDP in the 1970s; by contrast, it rose to 41% of GDP by the end of the 1980s. But all of that money went to corporations who grew NO new jobs. You cannot spend money and lower taxes at the same time that is like quitting your job and buying a new house.

“Economist Mike Kimel notes that the last five Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country’s indebtedness.

Economic historian J. Bradford DeLong, former Clinton Treasury Department official, noted that the contrast was not so much between Republicans and Democrats, but between Democrats and "old-style Republicans (Eisenhower and Nixon)" who on one hand (decreasing debt), and "new-style Republicans" on the other (increasing debt). D.Stockman, director of the

OMB under President Reagan, in an op-ed in the New York Times, blamed the "ideological tax-cutters" of the Reagan administration for the increase of national debt during the 1980s." I voted for Reagan and it was almost as big a mistake as voting for Obama.

PART ONE: I suggest a petition to raise Interest Earned on Savings of Deposit to bring to Americans with savings in banks $385 billion dollars which would be pumped into the economy raising jobs.

PART TWO: I further suggest that Either by an Executive Order or a new Bill raising huge excise taxes on all currently outsourced jobs and imported goods to meet or exceed prices of similar goods made in the average cost within the 50 states of the USA.

I suggest replacing Bernanke and placing Charles Schwab, Paul Krugman, Bill Clinton, or Paul O'Neil, all of which, by the way, appear to agree with a plan like this. Raise the interest rates enough to pay 5% IEOSD as before the war. The banks are using the 0% rates to further crush growth.

Below are a few ideas to vastly recapture the full employment market

1)- End TARP, replace Bernanke with those I suggested above and raise interest rates to a point which is generating 5% IEOSD releasing $385 Billions to discretionary spending into the marketplace?

2)- Create State Banks ala North Dakota, in every state. The State Bank model in North Dakota has worked profitably for 96 years with no semblance of the problems and avarice of corporate banks. Why not have each state create a Public State Bank and nationalize all corporate banks?

3)- Make the energy use-free-Geothermal HVAC the standard by law and cap prices on it so that the grants given for it are not eradicated by greedy HVAC Installers simply raising their prices the grant amount of 30%. Lower energy costs by mandating Insulation of R-30 in walls, R-50 to R-65 Ceilings and build smaller houses of stone/brick? Doing so would perk the building and rehab markets and diminish energy use considerably. Fire all certified appraisers which appraise homes and replace them with architects, with no ties to banks and builders , thus eliminating the gigantic corruption which was ignored during the 2000’s.

4- Either by an Executive Order or a new Bill ad huge excise taxes on all currently outsourced jobs which bring outsourced goods to meet or exceed prices of similar goods made in the USA and do not exempt the robber barons who claim that the pauper wages they are paying workers in the Northern Marianna Islands. I suggest Union scale Plus 15% for each Job whether by a corporation of contractor.

5)- Because of the low tax rate for the upper 1% they are each saving, an average $48 million a year, every year since the Bush tax cuts for the very rich. End that discrepancy, now by Executive Order or Bill.

6)-Tie ALL pensions, including state and federal and Social Security to pensions of the US Senate. Tie all healthcare for all citizens, to that of The senate also.

7)- Do as Iceland just did, arrest the bankers responsible for this disaster and indict them for fraud.

The United States has had a public debt since it’s founding in 1791. Debt relative to GDP rose rapidly during the 1980s under president Ronald Reagan, whose economics policies increased military spending and lowered tax rates. Gross debt in nominal dollars quadrupled during the Reagan era as well as during the era the senior Bush presidencies between 1980 -1992. The net public debt quintupled in nominal terms. Debt held by the public had declined from 28% to 26% of GDP in the 1970s; by contrast, it rose to 41% of GDP by the end of the 1980s. But all of that money went to corporations who grew NO new jobs. You cannot spend money and lower taxes at the same time that is like quitting your job and buying a new house.

“Economist Mike Kimel notes that the last five Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country’s indebtedness.

Economic historian J. Bradford DeLong, former Clinton Treasury Department official, noted that the contrast was not so much between Republicans and Democrats, but between Democrats and "old-style Republicans (Eisenhower and Nixon)" who on one hand (decreasing debt), and "new-style Republicans" on the other (increasing debt). D.Stockman, director of the

OMB under President Reagan, in an op-ed in the New York Times, blamed the "ideological tax-cutters" of the Reagan administration for the increase of national debt during the 1980s."

FDR said, "“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group,”

PS: World Debt: Argentina did wonderfully well as has Brazil, Sweden and many other using Progressive formulae, and Russia despite bankruptcy is doing just fine, thank you and one of the few nations who comprehends the fraud involved in this fake Corporate Creation called a “Recession” is Ice Land, which has arrested all of the bankers, thrown out it government, recreated its constitution and is punishing those responsible while Mr. Obama goes on with the fraudulent conspiracy of mysterious “debt” which is nothing more than a falsehood as greatest bank robbery in world history in which $29 Trillions in so-called “Loans” have been dealt out secretly to American Businesses so they can out last the poison “Austerity” which they hope will wipe out unions, workers the elderly and the ill and unemployed. The “debt is a thing created by a key click of a computer and can be dismissed with the same key click. More Icelandic bankers arrested – please note: this was published on January 20, 2011!

The JPM Derivatives Propping Up US Debt