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Road to Ruin: Patriotic Retirement Plan

Part of why we’re in deep trouble in this country is that people aren’t numbers literate. This leads them to embrace quick feel good solutions that are quite frankly madness.

Case in point is an e-mail I received today:

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Subject: PLAN TO FIX THE ECONOMY

This is from an article in the St. Petersburg Times Newspaper on Sunday. The Business Section asked readers for ideas on “How Would You Fix the Economy?”

I think this guy nailed it!

Dear Mr. President:

Please find below my suggestion for fixing America ‘s economy.
Instead of giving billions of dollars to companies that will squander the money on lavish parties and unearned bonuses, use the following plan.

You can call it the Patriotic Retirement Plan:

There are about 40 million people over 50 in the work force.

Pay them $1 million apiece severance for early retirement with the Following stipulations:

1) They MUST retire. Forty million job openings – Unemployment fixed.

2) They MUST buy a new American CAR. Forty million cars ordered – Auto Industry fixed.

3) They MUST either buy a house or pay off their mortgage – Housing Crisis fixed.

It can’t get any easier than that!

If more money is needed, have all members of Congress and their constituents pay their taxes…
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Beautiful in its simplicity and concrete in its effects. And very smug about the plans superiority. Even if it’s being offered in jest. Thanks to the lack of cues in print, I can’t tell. But assuming it’s sincerely offered as an idea, let’s do the math:

40,000,000 people x 1,000,000 dollars = $40,000,000,000,000

This is 40 Trillion dollars. For comparison, US Gross Domestic Product (GDP) is currently at 14.2 Trillion dollars according the US Bureau of Economic Analysis at http://www.bea.gov/national/index.htm#gdp.

The “Patriotic Retirement Plan” would take 2.8 times GDP to carry out. Maybe we could borrow it from China. But it doesn’t seem very patriotic to me to wipe out the entire US economy three times in the name of saving it.

I’m not a big fan of the bipartisan financial bailouts or of the bipartisan auto industry takeover. Particular since it seems like wealth transfers to the very same people who put us in our current troubles. But we should continue to fear very simplistic solutions.

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One Response

  1. Yes, people aren’t too smart about numbers. They don’t even grasp the huge difference between billion and trillion, or that 1.2 trillion is a whole lot more than 1.1 trillion.

    Happy July 4.

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