I agree. Problem is... I also think it's the flaw in the model. The system appears to be dependent upon a level of consumer spending which can only be achieved by taking on additional consumer debt. This is unsustainable.
I think debt may BE the model. speaking for myself. Times get lean I end up having to take on more debt. You can only trim so much. and then when there isnt enough cashflow to go around and cover everything. The only other option is dept. so I end up spending the lean times going into dept and the good times shedding it.
which is kinda the reverse of everyone else. the only winners are the ones who back credit. No matter what. They win.
For all the talk we hear on TV about credit being made available to businesses. Speaking form my personal experience. Credit being made available to me isnt the problem. I have enough credit at my disposal to keep me in dept for the next couple hundred years if I wanted it.
But you can give me all the credit in the world. A billion dollars worth even. And it still does me absolutely no good without customers calling on the phone.
I can understand why banks wouldnt want to lend to businesses. Same reason why its hard to get a loan for a home if you have no job.
But if the consumer spending problem is resolved, then the credit problem will resolve itself.
I think I have a partial solution at least at the state level (for NJ anyway) the deduction for energy efficient homes is good but it doesnt go anywhere near far enough.
Offer a 10% deduction on the labor costs for any home maintenence/improvement work done by a legally licenced contractor. you could also offer the same type thing for autos. But to take the deduction you must have a signed form from the legally licenced contractor.
This will accomplish several things.
Encourage the upkeep and appearances of homes and autos thus maintaining their value and energy efficiency/reduced pollution (we can use the "go green" card on this)
By requiring a form signed by a licensed contractor. Many of the illegal fly by night contractors that typical pay no sales or income taxes will either be eliminated or forced to operate legally (One of my largest frustrations now is the amount of illegal businesses I am having to compete with now)
At 10%
it would be alot harder for Illegally operated businesses to do business at the prices they would have to charge to avoid paying tax.
In NJ thats 3% above the sales tax of 7%. But. the deduction is only on the labor portion. This should be more then offset by the sales taxes on material and business and personal income taxes collected from increased business.
Then there would be the trickle up factor (for lack of a better term) For everything there is to be done. there is usually a material involved. From sand and mulch in landscaping to sheetrock, to roofing shingles to paint. All material there would be an increased demand for. Increased demand means more labor needed to acquire and process the raw material into these products. Then it must be shipped and stored before it can be sold to the end users.
all means increased demand for labor= more jobs
More Jobs means lower unemployment
Lower unemployment means a greater amount of people who pay taxes. And more consumers
Pretty soon that 10% looks like a drop in the well.
Now all you all have to do is elect me Emperor
Cause thats what its gonna take to get it done for reasons that cant be discussed here LOL
