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Behind the 'We Deserve It Dividend' hoopla

Idea sounds great until you do the math.

By Karen Datko Sep 30, 2009 2:42PM

The Internet is afire with a grand proposal. Instead of bailing out AIG to the tune of $85 billion, why not divide the money among all 200 million or so U.S. adults?


That gives $425,000 to every woman and man, the widely circulated e-mail says, or $297,500 after taxes. Wow.


This idea has gotten a lot of traction online, particularly as Congress is now considering a $700 billion bailout or rescue or whatever for America's financial institutions.

"Sounds like a plan," exclaimed Cathy at Cathy's Blog -- For Me For Once, one of many bloggers who've passed the $85 billion "We Deserve It Dividend" proposal on.


There's only one small problem with this plan.


"It only works out to $425 per person," an anonymous reader of Cathy's Blog wrote. "Whoever is circulating that idea is an idiot. Don't believe everything you read." And how.


But the WDID plan -- claimed by so many people as their own that it's impossible for us to know who hatched it (and forgot to double check the math) -- does suggest good uses for a huge chunk of cash if it were to fall into consumers' hands -- like paying off personal debt, spending it for college and investing it.


In fact, a Forbes.com article at MSN Money spells out other possible uses for the $700 billion contained in the latest bailout proposal:

  • The nation's bridges need $180 billion in repairs.

  • Rail infrastructure needs $185 billion in maintenance.

  • $150 billion would provide every American with private health insurance, and also pay for a universal automated health-information system.

  • The government could pay off the $500 billion cost of the war in Iraq. "Unlike investments in distressed assets, paying for the Iraq war won't produce a return, but $700 billion would stem the government's future debt obligations to its creditors," the article says.

The author of the original WDID e-mail also tapped into people's unhappiness with bailouts like the ones for AIG (actually a federal loan), Fannie Mae and Freddie Mac, and the $700 billion granddaddy of all deals being negotiated as we write. One of the things people wonder is how we're all going to pay for it.


"Yes, he did his math wrong. It actually works out to $425 per person," wrote "spectral44." "Better than the stick in the eye we're about to get, eh?"


Published Sept. 25, 2008

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