Posted by Eric Solis on December 15, 2009 under Public Policy | 
Debt Elimination Credit Vouchers (“DECV) Under DECV the government would issue vouchers to every man woman and child for purposes of eliminating debt. These credit vouchers would be in the form of a government loan and would be used as cash for the exclusive purpose of paying off debt. DECV vouchers are an actual dollar amount equal to the average amount of consumer debt owed per US household. Under this plan the DECV voucher can only be used to pay off consumer debt, college loans or a mortgage etc. If one does not have consumer debt, then the DECV can be used to fund an IRA, HSA or other long term savings need. DECV is structured as a government loan paid back over 10, 20, 30 or 40 years.DECV infuses cash into banks through the repayment of all consumer debt. But it will go through the hands of the tax payers who under any rescue plan will be footing the bill. DECV kills two birds with one stone as DECV vouchers will use tax payer money for their direct benefit by way of substantially reducing or eliminating Americans consumer debt. Banks will become a scaled down version of their former self, because the usury rates charged on consumer loans by banks will be paid off and no longer produce outsized revenue to the banking industry. The problem with infusing banks on the back end is that it keeps this massive consumer debt overhang in tact, which is at the core of the financial crisis.
By refinancing consumer debt, which can be as high as 36%, with long term government debt of 2%, we would free up as much as $150 billion net (est.) per year for every trillion of DECV issued. Under DECV the vacuum of wealth created by consumer debt would be eliminated and the aggregate interest charge to our country would be reduced in proportion to the net spread between consumer debt and government debt. Under the current plan all this money goes into the banking industry’s coffers.
This plan will relieve (not eliminate) pressure on the housing market and unclog the credit markets and derivatives tied to it (i.e. CDS, CDO, CMO etc.) because consumers will be more credit worthy at large. More consumers will be able to make their house payment since they will not be burden with consumer debt. Banks will get the much needed cash infusion and people who carried no debt will have a lump sum to sock away for retirement rewarding good financial management. DECV democratizes the bailout to inure to the benefit of all Americans as apposed to consolidating the benefit to a few.The Treasury and the Government will know exactly how much DECV will cost upfront in contrast to the open ended liability of the planned RTC2. According to the Federal Reserve Statistics Release on Consumer Credit dated July, 2008 revolving consumer debt is 3.5 trillion dollars. The demand for government securities is at an all time high while the securities backed by consumer debt are toxic.
DECV takes the toxic assets off the balance sheet of the banks, as prescribed by Treasury, the Fed and the Administration, but it does so through the hands of those footing the bill…the American tax payer.
Posted by Eric Solis on August 24, 2009 under Healthcare |
PUBLIC HEALTHCARE
I am compelled to write this with regard to the healthcare debate that our country is in. First, let me be clear that I am a fiscal, monetary and social conservative with moderate economic views. I consider myself an independent and am registered accordingly. I do not agree with Obama on 99% of the issues and like many am skeptical of his capacity, intentions and even his right to serve as President of our nation. With that said, I am just as skeptical of the insurance and pharmaceutical companies that control the choking points of the health care industry. Consider the following:
- What would it cost to get a piece of mail from LA to NY if it were left up to Federal Express?
- What would it cost to air condition your home if the Public Utilities Commission did not exist?
- What would private industry charge you to pump water into your home if not for the PUC?
- What would Elementary school cost if it were priced like private Universities?
- What would law enforcement cost if a public option did not exist?
- What would fire services cost if a public option did not exist?
I am a strong advocate of capitalism, but when it comes to “utility” type needs of society; it is not uncommon and indeed makes sense to have the “government” provide a foundational service to support availability and fair pricing. Remember government is supposed to be “we the people”. And while I get the mistrust of our government, at the core, the idea of eliminating the profit motive from healthcare makes sense and this point I would assert is long over due.
The healthcare industry is a monopoly. For example you do not have to have a computer, or Microsoft windows or the internet or a car. But we all have to have healthcare. We do not have to have coverage, but to live we have to have healthcare. So price fixing and corruption are part and parcel with this monopolistic industry. It is analogous to giving a group of for profit companies the right to price and sell us the oxygen we breathe. How many of us would want that? How many of us believe that business today would sell us oxygen at a fair price? Just look at the cell phone industry as an example; what they sell us the right to use the air waves and we all know they are gouging consumers. Remember that corporate America is every bit as corrupt as the Government.
Have you ever wondered why we get water so cheap? It is life sustaining and we can’t live without it. In my view healthcare falls in the same camp. To have only companies that want to profit off delivering healthcare is a PROBLEM and a BIG one at that. I am of the belief that the insurance industry is causing fear and confusion with regard to what a public option would look like. Think about this for a minute. The insurance industry earns upwards of 50 billion in net profits year in and year out. If you were to add back all of the executive pay, marketing, commissions and fees adding up to hundreds of billions of dollars that is paid out year after year, you would discover enough money to insure millions of people. Double goes for the Pharmaceutical industry (have you asked yourself why there is a drug store on every corner these days even out in the middle of nowhere? BIG MONEY!). The fact is that the number is as large as the stimulus package that was paid out in 2008, but in this case it would be every year and it would go directly towards creating a solution for our nation’s dire healthcare problem. Put another way, if this money were absorbed for the benefit of society as a dividend to keep healthcare costs down, it would equate to a huge savings for society over time and each American would be a benefactor of this freed up capital that is currently going into the coffers of the healthcare monopoly, year after year after year, equating to trillions of dollars over time.
Personally I think a public utilities sort of arrangement makes the most sense. Pharmaceutical and health insurance companies should be treated like utility companies whereby they are give rate increase approval to reach statutory ROI. This would create private industry solution to a public “utility” need (i.e. healthcare) with a rate of return that mirrors that of a public utility company (i.e. 10%) that is given an implied guarantee and could even be subsidized by the government. This is a model that Americans are familiar with and use every day when we flip the light switch on in their homes or when we run the bath.
Posted by Eric Solis on August 10, 2009 under Investment Strategies, Public Policy, Saving and Investing, Stock Market, financial crisis |
With all of the chaos in the world of finance, I was recently asked to appear on Fox News kttv_s2521, to discuss financial principals that would work for the average American in today’s uncertain world.
I spoke on issues regarding the impact that the global financial crisis and economic meltdown can have on you, your family and your wallet. I postulate a strong belief that now is the time to reclaim our country; together we can “buy America back one dollar at a time, one day at a time, and one person at a time” through an increased National savings rate and personal stewardship.
I am an unwavering champion of the “little guy”. My goal is to create sustainable financial solutions for all of man kind by thinking differently and being willing to do the hard work of breaking down barriers (and believe me it is not easy).
This interview demonstrates how a highly complex financial breakdown can be utilized as an opportunity to improve on your personal vision and financial goals.
Now watch the interview kttv_s2521 and pass it along to family and friends. Also, remember to post a comment when you are done as your feedback is important to me.
God bless,
Eric
Posted by Eric Solis on under Public Policy, Stewardship/Spiritual/Finance |
“For they that are after the flesh do mind the things of the flesh; but they that are after the Spirit of things of the Spirit.” Romans 8:5
There was a time when the things of God were important to America and its people. The American Dream was not synonymous with consumerism and having more stuff. The balance of life style and concern for our fellow man was imbedded in our culture. But today, even (or especially) our churches are filled with people that are distracted with the things of this world and immediate self gratification and not the will or work of God.
Most people do not connect their finances to the existence of God, even though our currency reminds us that “In God We Trust”. Especially in the media, few are courageous enough to connect the word of God to the world of good, by speaking out with regard to how these realities co-exist. But unless we as a people (not the government) begin to acknowledge this connection and thus leave enough resources to care for our pressing social needs, then our personal and national finances will continue to suffer and our liberty will continue to erode from the inside out.
The American Dream is part and parcel to being a self governing people under God, with liberty and justice for all. This means that we must give of ourselves by way of time and resources to His will and be willing to sacrifice along these lines.
Starting with our families and churches, extending to our communities, expanding to our nation and reaching across the globe with the love of God is the cure for the consumer driven malady gripping the finances of our world today.
As we eliminate the distractions of life, driven by our own passions and desires, we will become able to look outside of ourselves to see the lost and hurting people all around us and become willing to help. And as we shift towards seeing people as the purpose rather than the problem, we will see the glorious fruit of our Nation blessed once again by God.
”For if ye live after the flesh, ye shall die. But if ye through the Spirit do mortify the deeds of the body, ye shall live.” Romans 8:13
