Give $500 per month to each U.S. Citizen as a Resolution to Our Economic Problems

In this essay I want to propose that the U.S. Treasury should give every U.S. Citizen $500 per month indefinitely. This view is very similar to the Social Credit ideas proposed by economist C. H. Douglas (1879–1952).

The dominant economic theme in the U.S. and the world economy today is: Factory over-capacity and lots of willing, and able labor which goes unemployed. I propose that we use this idle factory and people capacity by stimulating demand. I propose we give $500 per month to every U.S. Citizen indefinitely without regard to their current income or anything else. Rich, poor, young and old would receive this credit (i.e., cash). Even those currently on public assistance would receive this benefit. This rule also simplifies the implementation of this idea. The rich and the well-to-do may not even spend most of the cash given to them which is ok because the middle class, the poor and the unemployed are likely to spend most of the benefit.

The cost of this benefit would be about $1.85 trillion a year (about 12.5% of forecasted 2010 GDP). I am not proposing taxes be raised or other spending be cut. So where will the money come from? The money is already there in the form of idle capacity. This idle capacity consists of world manufacturing capacity running at record low utilization rate and hoards of healthy, willing, able, disciplined and educated labor (i.e., the unemployed). Read more...