Finding a supportive stance on an issue where we disagree can be difficult. Federal bailout plans, such as the ongoing quantitative easing program, are challenging to justify. However, the potential for something positive to come from this program has arrived! With the City of Detroit declaring bankruptcy
, there is potential to justify some of the stimulus money being created.
According to emergency manager of Detroit, Kevin Orr has stated that the debt obligation for Detroit ranges from 18 to 20 billion dollars. The poverty stricken city has an unemployment rate of 16%, and the US census reports that from 2007 to 2011 over 36% of the population is living below the poverty line. For a city of over 700,000 people, that’s more than 250,000 people living below the poverty line. Of the many initial effects this state of bankruptcy could have, pensions are on top of the discussion.
The blue-collar type of worker found in Detroit work for everything they have. Now there is a risk for an older generation to lose the pension they fought desperately for. Fiscally most bailouts are irresponsible, and to stand behind one goes against a lot of the core beliefs the libertarians stand for. To propose a fiscally irresponsible move, there has to be great intent, and a realistic responsible outcome that follows.
The proposition this blog is proposing, is not adding to the current stimulus plan. It is simply making the recommendation of adverting a portion of the current stimulus in place, Quantitative Easing 3, and using that to ensure the pension plans that could be lost.
The potential harm facing this situation is huge. The older generation relying on pension funds tied up in Detroit would be unlikely to find employment where they can sustain a suitable life style without their pensions. Removing their purchasing power, and adding them to government assisted aid will only weaken Detroit. Financially ensuring them of the money they have worked for keeps consumers alive in the poverty stricken Detroit area. This is a scenario worth looking at.
There is no question that Quantitative Easing was an irresponsible reaction to the Recession. The continuance of Quantitative Easing has created several potential negative consequences that were unnecessary. If the Federal Reserve is going to continue this irresponsible stimulus program, let’s at least utilize the potential to help rescue hard working honest Americans.
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