Fiscal Conservative Humor: Sheila Bair's Modest Proposal

Sheila Bair has a funny piece in the Washington Post that is well worth your time. 

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore. 

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them. 

So why not let everyone participate? 

Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.) 

Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years.

Hilarious! (And much funnier than anything I've seen from the Matt Taibibis of the world). You should read the whole thing.


You may recall Charles Murray wrote a short book a few years ago called In Our Hands that made basically the same point about welfare spending. He ran the numbers and found that if you took all of the money spent annually on welfare and just divided it equally between each and every American, we would all receive checks of about $10,000 per year. (and Murray wasn't counting entitlement spending for Medicare or Social Security). Along with being infinitely more egalitarian, Murray's "modest proposal" would also have the virtue of being cheap to administer. There's no need to funnel money to the HUD's, EBT's, AFDC's, of the world, not to mention innumerable non-profits (AKA left-wing advocacy groups), if everyone's getting the same benefits. We'd put the left-wing money laundering scheme out of business overnight!


The point of Murray's exercise, and Bair's, is that we are spending an inordinate amount of money on ourselves, in the most inefficient manner possible, and to very little result. The numbers are stark, not to mention enormous; but, in our stunted political-media world, any Republican who dares to suggest anything resembling the above gets the full blown "war-on-women" treatment until he retreats back to private life. The Democrats' fantasy math is what rules our world, and the only way you can attack it is through humor and satire.