Redistribution: How To Pump Large $$ Into the Economy Without Hurting Capitalism

[Silhouette]

OK, here's my latest thread to piss everyone off here..lol..

It occurs to me that we have a collosal amount of wealth concentrated mainly in the older people of this country that rode the wave of the 1950s & 1960s in their prime.

There is a problem with hoarding with this demographic for many reasons but one of them is fear of losing the family's nest egg. They want to keep the wealth. And rightly so.

Yet we know that the bubble that was artificially kept on life support since 2008 is soon to burst as the fed backs off printing funny money. What to do?

I think I may have the perfect idea. Maybe. I'm sure dozens will show up here to tell me how I'm full of it but hear me out.

What if there were large incentives given to these wealthy older people to loan money to their CHILDREN and maybe nieces and nephews. Big tax shelters, breaks and the like. Maybe they already exist..I don't know. This could help them and their children and the economy in these ways:

1. With their wealth loaned out to their own flesh and blood, they'd be less likely to see this "taxation" as a threat to their long lives of hard work. The decision is up to them and the opportunity available should they want to choose it.

2. That wealth could be quickly converted into real goods and things to bolster their children's concrete wealth. The banks will fight this idea, but who cares? If the parents loan the kids the money for things like business startups and real estate, just like banks do, at a very low rate, but still higher than their IRAs etc. are earning in savings, then those children could be obligated to pay their parents back just like a bank, complete with collateral secured for the loan, foreclosure and the like to protect them.. creating an income for the parents that couldn't be threatened by a bubble bursting.

3. Immediately, the younger generations who work still could start investing in new industry and business, become more solvent and through their efforts of this once idle money, could provide their parents with an income, and create a larger tax base for this money not currently taxed...

Those are just the raw points. The idea is ripening in my mind but your input will be appreciated. This is an idea for voluntary wealth redistribution where the wealth is distributed only among close blood relatives? After all, isn't that why we all work anyway, to help set up our kids and grandkids?

Just a thought.

 

[Indeependent]

This concept, the "Living Yeh-roo-shah (Inheritance)" is known and practiced amongst Orthodox Jews.

 

[Silhouette]

Yes, you know now that you mention it, many many of my jewish friends [I have quite a lot of them from where I grew up], all have been well set by their parents and not a single one of them I know of have ever been on welfare or taken handouts. Several of them are quite wealthy now themselves and are spoiling their own parents who are taking it easy in their old age.

A very intelligent system to encourage IMHO. Well done Indeependent !

 

[Silhouette]

I have a friend who works for a bank. She sees the profiles of 1000s of people. Most of the 60 and older crowd have very large surplus funds in the hundreds of thousands if not millions. And they're not doing anything with it. They check in on it now and again, see about the interest and so forth but it just sits there in the banks.

Meanwhile she sees an endless stream of 30, 40 and 50 somethings, our most productive age groups, filing in trying to patch bills together month to month, becoming more and more insolvent by the week.

Yet the 30, 40 and 50 year olds are the workhorses of our country. They should be working that cash like a rented mule. Instead they grow old with nothing to offer the country but a burden as they age.

It just seems like a good idea this "yeh-roo-sha".

I also was thinking that if the banks notice the fed giving these incentives to these cash-holders, an instant situation of competition would begin where the banks would want to not let all those potential loans [and money sitting in their hands] slip out of their hands. Then you'd see the lending begin where, frankly, my friend says the banks are doing all the things they can do to look like they're "trying to loan" when in fact they are denying prime candidates right and left so they don't take a risk. Why should they? They've got all the older folks scared into sitting on that money in their accounts that they are realizing great returns on from their own investments with it. ie: they're aware of the recent laws to reinvest but they are finding loopholes not to lend in the country because frankly they like getting rich and to hell with the country..

I'd think this idea would kick that scam out from underneath them and force them to start competing with the wealthy 60, 70 & 80 year olds for their own children?

 

[Silhouette]

This concept, the "Living Yeh-roo-shah (Inheritance)" is known and practiced amongst Orthodox Jews.

I've been trying searches on that term but it keeps coming up blank. Can you give me a link that talks about it?

 

[Silhouette]

I also wonder if anyone knows if there are already decent incentives for the rich older generation to loan to their kids?

 

[Silhouette]

Young adults are in less debt than they were a decade ago, but that's not a good thing.

It's not because legions of Americans under age 35 have suddenly become fiscally responsible. It's more likely that their shaky economic foundations either prevent them from qualifying for a loan or even thinking about applying for one, according to those studying the trend....

..."It's a sign of economic struggle, not economic success," said Richard Fry, senior economist at the Pew Research Center. "They don't have the mortgage, but they don't have the house."

The center found that young adults' debt levels dropped nearly 14% between 2001 and 2010, while rising 63% for those age 35 and older, according to a recent Pew study.

The real-world ramifications are eye-popping. The share of younger households owning their primary residence fell to 34% in 2011, down from 40% in 2007. Only 66% owned or leased at least one vehicle in 2011, down from 73% four years earlier, as car loans plunged. Credit card balances have also fallen. Young adults are too broke to get loans - Feb. 27, 2013

I was thinking too that if the older adults loan their blood kin money, these 30, 40 & 50 somethings could have these loans apply to their credit rating??

 

[dblack]

I can appreciate the intent of the OP, and there's some cause to agree - but trying to manipulate the economy with state power is what got us into all this mess in the first place. We need to abolish the practice outright and create a 'wall of separation' between and state coercion and economic power.

 

[boedicca]

Would the loans be subordinated to the huge student loan debts that many young people are already having trouble paying back?

 

[Steven_R]

You want to get rid of the student loan debt problem, then just stop loaning to students going after soft degrees like History, Political Science, Art, and Gender Studies. No STEM degree, no federal loans.

 

[CrusaderFrank]

OK, here's my latest thread to piss everyone off here..lol..

It occurs to me that we have a collosal amount of wealth concentrated mainly in the older people of this country that rode the wave of the 1950s & 1960s in their prime.

There is a problem with hoarding with this demographic for many reasons but one of them is fear of losing the family's nest egg. They want to keep the wealth. And rightly so.

Yet we know that the bubble that was artificially kept on life support since 2008 is soon to burst as the fed backs off printing funny money. What to do?

I think I may have the perfect idea. Maybe. I'm sure dozens will show up here to tell me how I'm full of it but hear me out.

What if there were large incentives given to these wealthy older people to loan money to their CHILDREN and maybe nieces and nephews. Big tax shelters, breaks and the like. Maybe they already exist..I don't know. This could help them and their children and the economy in these ways:

1. With their wealth loaned out to their own flesh and blood, they'd be less likely to see this "taxation" as a threat to their long lives of hard work. The decision is up to them and the opportunity available should they want to choose it.

2. That wealth could be quickly converted into real goods and things to bolster their children's concrete wealth. The banks will fight this idea, but who cares? If the parents loan the kids the money for things like business startups and real estate, just like banks do, at a very low rate, but still higher than their IRAs etc. are earning in savings, then those children could be obligated to pay their parents back just like a bank, complete with collateral secured for the loan, foreclosure and the like to protect them.. creating an income for the parents that couldn't be threatened by a bubble bursting.

3. Immediately, the younger generations who work still could start investing in new industry and business, become more solvent and through their efforts of this once idle money, could provide their parents with an income, and create a larger tax base for this money not currently taxed...

Those are just the raw points. The idea is ripening in my mind but your input will be appreciated. This is an idea for voluntary wealth redistribution where the wealth is distributed only among close blood relatives? After all, isn't that why we all work anyway, to help set up our kids and grandkids?

Just a thought.

Redistribution: Only economic system that comes with a 100% Fail Guarantee

 

[R.C. Christian]

What a lousy pinko commie thread this is.

 

[Silhouette]

Redistribution: Only economic system that comes with a 100% Fail Guarantee

Really? Even and only when it is via incentives and kept within one's own blood family?