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CURE FOR UNEMPLOYMENT
GOVERNMENT GUARANTEED BUSINESS LOANS WILL BRING U.S. UNEMPLOYMENT TO ZERO IF THE FIXTHEUSA LOAN PROGRAM IS IMPLEMENTED.
American entrepreneurs develop business plans and present the plans to banks for review.
Use the bank infrastructure that is in place to evaluate the reasonableness of the business plans.
Loan 100% of the actual amount requested by the potential business borrower at 1% above the fed fund rate if:
A : The potential business borrower has a credible plan to create one permanent American job for every $50,000 borrowed.
B : The potential business borrower has a credible plan to become profitable enough within three years to be able to pay the annual interest on the principal loan amount and reduce principal on the loan by 1% per year after three years of interest only payments.
The government guarantees the loans and the banks are guaranteed to make 1% of every dollar they loan, so long as the bank is not complicit with the entrepreneur in fraud.
All FDIC banks must participate in this and must lend the money to entrepreneurs if the necessary loan criteria are met. Banks will otherwise be unaffected and be able to make such other investments as the law allows.
Under the requirement that one job be created for every $50,000 borrowed, 15 million unemployed Americans will be employed when banks have loaned out $750 billion dollars. The banks can't lose because the government will guarantee the loan and the government can't lose because it does not have to pay a penny unless a business fails. If they all fail, the government will have temporarily helped employ 15 million people for less money than the US taxpayers paid for the Iraq war or recent bailouts. In the meantime, the newly employed people pay income tax, the newly employed people spend money on retail, the newly employed people can afford housing so the housing market rebounds and the commercial real estate market rebounds with new demand for commercial space. If the 15 million newly employed pay the middle class tax average of over 6 thousand per year, over 90 billion dollars per year in new federal income tax revenue will be realized. This is in addition to the infusion of dollars into the general economy and the lack of need to pay unemployment benefits. It is clear that the benefits of ending unemployment far outweigh the 750 billion dollar maximum liability exposure associated with this program.
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