Hugo Chavez has sent in troops to nationalize rice processing companies in Venezuela:

“This government is here to protect the people, not the bourgeoisie or the rich,” said Mr. Chavez, ordering military authorities to “take control of and intervene in all of these businesses that process rice in Venezuela.”

I’m guessing that there are employees from various industries that Chavez has nationalized that would jump at the opportunity to immigrate to the United States. The U.S. Census Bureau reports that there were approximately 19 million vacant homes in the fourth quarter of 2008. Why not open the doors to immigration for skilled individuals that have the means and are willing to put down 20% towards a new home?

It would certainly help the housing industry since there is no way housing prices can recover with so much excess inventory. The question is whether that type of immigration hurts or harms an economy in recession. I suspect it helps. I also suspect that the Lou Dobbs types would be dead against it.

In the United States, the total receipts for fiscal year 2007 was $2.4 trillion. The $800 billion stimulus bill, therefore, is approximately 1/3 of the total receipts for 2007.

1/3 is a nice number to work with. This $800 billion debt will eventually have to be paid back so let us say that all individuals and corporations will receive gift cards worth 1/3 of the amount of tax they paid for 2007. It is not a perfectly fair system but it is pretty close in my opinion.

So these are the rules we have so far:

  1. all individuals and corporations that paid federal tax for 2007 will receive a gift card
  2. the amount of each gift card will be 1/3 of the federal tax paid in 2007 by the individual/corporation
  3. each gift card will expire twelve months after it is issued
  4. not using the gift card is perfectly OK, just let it expire

Unlike a tax cut, the gift card stimulus must be spent and it arrives immediately as one big lump sum.

Canada In The Press

February 10, 2009

Wow, look at all the nice things Newsweek has to say about Canadians.

Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike our own insolvent Social Security. Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.

Meanwhile, the Wall Street Journal is warning their man Obama about the horrors of the Canadian healthcare system.

Canada’s system comes at the cost of pain and suffering for patients who find themselves stuck on waiting lists with nowhere to go. Americans can only hope that Barack Obama heeds the lessons that can be learned from Canadian hardships.

One of these frozen tundras is not like the other.

Gift Card Stimulus

February 10, 2009

Here is a thought experiment. Imagine we are in a recession and the powers that be decide to spend 800 Billion to stimulate the economy. The 800 Billion will be in the form of Gift Cards that must be redeemed within 12 months. You have been named Gift Card Czar.

The remaining decisions you must make as Gift Card Czar are:

  1. What stores/companies/organizations will be allowed to participate.
  2. Who will get to spend the Gift Cards.

Can you structure the Gift Card Stimulus to help the economy?